Streaming royalties have been a hot topic in the music industry recently, with Universal and Deezer proposing an artist-centric royalty system. However, while fixing royalties is important, it is just one piece of the puzzle. Mark Mulligan of consultancy MIDiA argues that streaming’s problems go beyond royalties and need a comprehensive solution.
In the early days of streaming, it was primarily a platform for listening to music. However, as streaming became mainstream, it shifted towards being a replacement for music radio. This shift has resulted in passive playlists, lean-back listening, and functional music, which are driven consumer behavior and data. The problem is that this is not necessarily what creators and rightsholders want. Consumers have chosen this path, and any attempt to push against it risks alienating the customer base.
To address streaming’s problems, solutions must take into account the needs of the audience. Mulligan suggests using the POST framework: understanding customers and their needs, identifying objectives, shaping strategy, and then deciding on the technology. It is crucial to prioritize the demand side (consumers) rather than just the supply side (creators and rightsholders).
Streaming has two main problems: dealing with the quantity of music and the zero-sum royalty system. The solution is not simply reducing the quantity of music or implementing a two-tier royalty system. Instead, Mulligan proposes an “algorithm multiplier” that gives higher weight to successful artists while also amplifying the success of emerging artists. This approach ensures that quality cuts through the clutter, regardless of scale.
While the algorithm multiplier would address many of the current issues, more needs to be done to benefit all stakeholders. One solution proposed MIDiA is the introduction of $2 artist subscription streaming bolt-ons, which would provide additional value and income opportunities for artists. This approach aims to segment artist development and give consumers more chances to support their favorite artists.
In conclusion, fixing the problems in the music streaming industry requires a comprehensive approach that goes beyond royalties alone. By understanding audience needs, implementing an algorithm multiplier, and introducing additional value into the system, it is possible to create a more sustainable and satisfactory streaming ecosystem for all stakeholders.
Source: Mark Mulligan, MIDiA – “Streaming’s problems will not be fixed royalties alone”
