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Will Streaming Overtake File-Sharing & Downloads?

image from www.toothpastefordinner.com Elliot Van Buskirk at Evolver.fm points to the latest numbers released by the NPD Group, which suggest that streaming music is growing faster than music downloading in the United States. The interesting part of their findings is that they back up the contention that the streaming is a double-edged sword.

On one hand, it pushes fans to stream music instead of file sharing it. A good thing. Yet, on the other, it also suffices the appetite of fans that would've otherwise bought legal downloads. Put differently, the record industry won't pull fans away from the Pirate Bay without deterring them from iTunes too.

This is the dilemma. Creating a music experience that's better than piracy also means that it would have to be better than buying it too. Since, at least at this point, streaming doesn't pay more than downloads; the incentives for the record industry to promote the development of a robust streaming sector aren't there.

It's like the early days of iTunes. Labels understood that they needed to endorse a reliable method for fans to obtain single downloads, but they also needed to maintain their relationship with big-box retailers—the bread and butter of music sales. They had to give fans what they wanted without seriously damaging store traffic. Now, they're running into the problem of sustaining digital downloads as a business model while still promoting the growth of the emergent ecology of music services online, because they can't afford to cannibalize the digital album market.

It makes you wonder. Is the record industry readily embracing services that lead fans to convert from file sharing to legal means? Of course, they are. It's why we have some of the amazing services that we have available. However, it doesn't seem like the sites are at their full potential. If the services were, they'd be both better than downloading for free and going into a store and buying it, let alone, the cold experience of getting music on iTunes. Fix the file sharing problem, through rapid innovation, and you break the current business model, without getting a new one. That seems to be where things are at now. We know how to fix the record industry, on some level, it's just that doing so would actually break it... again.

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Image Credit: Toothpaste For Dinner.

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