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What Does Free Streaming Mean for the Music Industry?

Music lovers everywhere can rejoice! T-Mobile announced that customers can stream music without worrying about going over their data. Users will be able to use apps like Pandora, Slacker Radio, iHeart Radio and Spotify on the latest T-Mobile phones and tablets like the Galaxy Note 3 to listen to music whenever and wherever they want. While this is obviously great for consumers, what does this do for the musicians? How are streaming services affecting the music industry? While there are some doubts that this move benefits the industry, the outlook is generally favorable.

Increased Exposure for Artists

In 2013, Nielson reported that 68 percent of Americans used music streaming services in the past year, and that sales of music went down 6.3 percent. Although this could hurt bigger artists, independent and lesser-known musicians can enjoy an increase in exposure by putting their music on this medium.

An increase in exposure leads not only to royalties for each play but to an increase in music sales and ticket revenue. The intelligent algorithms of these websites and apps allow users to create stations off music they already know and discover music based off a similar sound. Plus, apps like Songkick are integrated into some streaming services, which allow users to find out when the artists they listen to are in town.

Boosts for Record Labels

The new exposure doesn't only benefit the artist but also benefits the record label. A savvy user of Spotify or Pandora who wants to delve further into their new favorite artist will research the label associated with the artist. Independent labels especially feature bands that have similar sounds, so it's not atypical for a fan of one band to become a fan of all the bands on their label.

Online streaming services allow for this to happen in an age where music discovery has (for better or worse) moved to algorithms and online media. If played right, streaming services will allow musicians to connect with new fans based on their current tastes.

The Freedom to Listen to What You Want

The revolutionary streaming plan implemented by T-Mobile gives consumers the freedom to listen to what they want, when they want. This sends signals to marketers, music executives and musicians about the music people actually want to hear as opposed to what music is played on the radio.

No longer will customers have to sit through radio commercials or listen to songs that do not interest them. On long car rides, customers will no longer have to scan the stations in remote areas or be forced to listen to genres they don't like. Instead, they can listen to that song they have been obsessed with for weeks or listen to albums spanning over multiple decades and hundreds of genres.

Plus, the data collected from what people are listening to on the streaming services will allow marketers to understand what people really like instead of telling them what to listen to. Artists could then begin creating music tailored to the tastes of their listeners. In a sense, it's creating an automation of music creativity.

What Does Free Streaming Mean for the Music Industry?

Reader Comments (3)

I still don't see how exposure means anything without some kind of lead capture, which doesn't exist on current streaming platforms. Lead capture, email marketing, being more valuable than any streaming income.

Also, do musicians have access to T-Mobile's customer data?

August 19 | Unregistered CommenterKyle Williams

This is one more piece of evidence that the truly free market will really work. It may not look or feel like what we are used to but it will work and in the process everybody benefits including those who need to make a profit...... Now if we musicians could only teach that to our control freak governments.

August 23 | Unregistered CommenterSam Glionna

Of what value is the "exposure" of streaming if there is little or no income to be made from it?
The pay-out per stream is ludicrously low, and streaming cannibalizes sales.

September 11 | Unregistered CommenterSerge

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