Why does the listening public think music is worthless? Although music streaming has become hugely popular, this popularity has yet to translate into significant revenue, largely because potential subscribers don't feel that having tens of millions of songs at their fingertips is worth ten bucks a month.
Guest Post by Hugh McIntyre on Forbes
For about ten years now, the recorded music industry has been in a pretty steady decline in terms of how much money is coming in. Ever since the public wrapped their heads around the idea of digital downloads—both in terms of piracy, and then iTunes, which certainly helped but didn’t stop the problem—revenues have dipped almost every year. A look at the number of records sold and the profits earned twenty years ago would make a newer executive cry.
With streaming becoming the way that people are accessing music, money is becoming even tighter in some places. Even though people are consuming more music these days than ever (we’ve surpassed one trillion streams so far this year already), they aren’t paying huge sums for it. As streaming continues to grow in popularity, there are going to be a lot of problems that the industry will have to tackle if it is to survive, but there is one that doesn’t get a lot of attention: the problem of perceived worth.
Over the past ten to fifteen years, the listening public has picked up the idea that music is all but worthless, though personally very important. Between illegally downloading songs from Napster and Limewire and then having millions of tracks at their disposal for free (with an occasional ad thrown in there), it isn’t hard to understand how people began perceiving music as something cheap. Since it is both readily available and they don’t consider it to be worth a lot of money, many are simply unwilling to pay for it in any form.
Of course, this perception is entirely incorrect, but anybody who took Marketing 101 will tell you that it doesn’t matter. People will pay what they perceive something to be worth, and reason often has nothing to do with their decision making process. This is why millions of Americans will pay $5 for a coffee everyday at Starbucks, but they won’t hand over $10 for access to tens of millions of tracks, even if it helps the musicians and singers they have such strong connections with. All music has value, but it’s been lost on many over the years.
The industry needs to focus on convincing people that music is highly valuable, and that if they want to listen to it, they should pay for it. It will be tough to backtrack now that millions access their tunes for free (via platforms like YouTube, Soundcloud, and free tiers on Spotify and Pandora), but moving forward, making the case that not just the music, but the access to it, is worth something could be a good move.