New players in the music industry: lifeboats or killer whales? the role of streaming platforms

Date09 September 2019
Published date09 September 2019
DOIhttps://doi.org/10.1108/DPRG-06-2019-0041
Pages525-549
AuthorJean Paul Simon
Subject MatterInformation & knowledge management
New players in the music industry:
lifeboats or killer whales? the role
of streaming platforms
Jean Paul Simon
From an historical viewpoint the production, distribution, circulation and consumption
of music went through numerous changes and displayed multiple interactions
between artists, instruments and consumers. Music and the music experience are
not only universally shared (Se
`ve, 2013;Wolff, 2015) but relies on evolving patterns of
consumption, on various forms of production and patronage, as well as on the on-going
creation of instruments, around12,000 (out of which 10,000 non-European) according to the
Grove Dictionary of Musical Instruments(Sadie, 1985).
Music, like books, has had a very sophisticated network of players and a broad
division of labour for an array of different tasks (Becker, 1982). Music publishing, the
first segment of the music industry to emerge as such, did not begin on a large scale
before the mid-fifteenth century with the development of mechanical techniques for
printing music. Prior to this, music has to be copied out by hand. As noted by
Leurdjik et al. (2014,p.133),“the music industry began as an industry of publishers
who contracted composers and lyricists[...]”. Artists have been relying on various
sources of revenues, contractual or not, supported or not by patrons (aristocrats,
church[...]). For instance, at the end of the eig hteenth century, Prince Esterhazy
hired Joseph Haydn as his music director (Kapellmeister) for composing, running the
orchestra, playing chamber music and the production of a series of operas
(Abraham, 1979,p.493).
Publishing music is still an important segment of the music industry together with
recorded music and live performances, even if their respective parts vary historically
and across regions (Figure 1). Music publishing pioneered the use of copyright to
collect royalties, as, for instance in the USA, this segment of the industry was first
granted copyright protection (for sheet music) in 1831; the Recorded Music segment
had to wait until 1972, to be given any copyright protection (CITI: 17). A CITI (2018)
report breaks down the revenues between business-to-business revenues (music
publishing and licensing), music ads (radio, TV and video) and consumer outlays
(physical and digital sales, concerts and subscriptions) stressing that some segments
(concerts and subscriptions) are faring better than others (ads, physical sales). This
multidimensional aspect of the music industry is often insufficiently taken into account,
especially as the recorded music industry has been moaning for over a decade about
its declining revenue for a period of almost 15 years, according to the trade association
of the recorded music industry (IFPI,2018a, 2018b), putting the blame on illegal
downloading, on infringements to copyright (“piracy”) enabled by the rise of the
internet. However, the debates about copyright tend to overshadow the tensions
Jean Paul Simon is based
at JPS Public Policy
Consulting, Seville, Spain.
Received 1 April 2019
Accepted 3 June 2019
DOI 10.1108/DPRG-06-2019-0041 VOL. 21 NO. 6 2019, pp. 525-549, ©Emerald Publishing Limited, ISSN 2398-5038 jDIGITAL POLICY, REGULATION AND GOVERNANCE jPAGE 525
among the traditional players about the fair retribution for each party (artist, publisher,
distributor).
Indeed, the arrival of the ICTs and the internet brought a profound disruption of its
legacy business model and production processes. The digital revolution has rapidly
had a severe effect in the recorded music industry, where several changes happened
over a brief period (Hadida and Paris, 2014;Blanc and Huault, 2014). In the music
sector, physical supports have been changing several times over the past decades.
However, until the 2000s, the recorded music industry had been mostly marked by
technological breakthroughs that boosted physical sales that grew steadily from 1984
on, and reached a peak in 2006 (Figures 3 and 4). In the 1980s, cassettes were
replacing vinyl albums (or LPs), and by the 1990s, CDs were replacing cassettes. Then
the sales of physical goods started declining. Nevertheless, in 2017, the global
recorded music market grew by 8.1 per cent for the third consecutive year (IFPI,2018a,
2018b), the industry was up again in 2018, by $2.2bn to generate $18.8bn (Stassen,
2019a). This growth has been driven by the fast-increasing revenues from streaming: at
the end of 2018 there were 278 million paid subscribers (Mulligan, 2019a). In spite of
this growth, the same trade association stresses that the segment is still just 68.4 per
cent of the market’s peak in 1999 with total industry revenues for 2017. So, the bliss is
not perfect, especially as a strong argument has been growing between the parties
around the issues of fees for royalty payments: the collector deems it too low, the
collected, too high.
The aim of this paper is to take a closer look at the role of the new players forthe distribution
of music, the streaming platforms vis-a
`-vis the music industry as a whole, so as to better
document their evolving relationships with all the parties involved as well as to shed some
light on their business models. The first section put the evolution of the music industry in
perspective, taking a look at trends over a longer period, with a specific focus on the
recorded music segment. The second part is based on four case studies of streaming
platforms: Anghami (Middle-East), Deezer (Europe), Spotify (Europe) and Tencent Musical
Entertainment (China). The conclusion considers some possible scenario for the
restructuring of the music market.
The paper is based on desk research, a review of literature, a review of the technical
journals, trade publications, and the analysis of annual reports. The paper is part of an on-
going research on innovation in the creativeindustries.
Figure 1 The actual world of music
PAGE 526 jDIGITAL POLICY, REGULATION AND GOVERNANCE jVOL. 21 NO. 6 2019

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT