Have online music streaming services led to the profitability of the local music industry?

Due to an extensive increase in technological advances, there are infinite ways to view and create content. Formats like Netflix, Stan, and Hulu have allowed viewers to stream movies, TV shows, and kids programmes for competitive prices each month. In context of the music industry, free platforms such as Soundcloud, Pandora and Spotify give listeners the freedom to play albums, individual singles, and in some cases, a whole discography of a particular artist. This rapid increase in the number of people using online music streaming services has led to a decline in the sales of purchased content like CD’s, vinyls, and songs from the iTunes store. After careful research I concluded that this drop in the amount of units sold comes at a price for artists; an artist on Spotify with average to low popularity would only earn around $0.0011 US Dollars per play. I’m not implying that artists do not make money anymore or that customers don’t purchase music content anymore, but rather that artists’ royalties are being compromised for listeners’ convenience.spotify_featured

Spotify can certainly increase the online persona of an artist and develop popularity which can then lead to interest from buyers. However, I am interested to see how these services have affected the music industry in general. Is becoming an artist still a profitable occupation? Do artists have to tour more to make a living? Will low or high profitability see a rise or fall in the amount of content creation? Nonetheless, the primary question is, ‘Has online streaming services led to the profitability of the local music industry?’

To gain an understanding of the topic, I analysed Kaitlyn Paradise’s article on ‘Digital music streaming in the 21st century’, which investigates all things surrounding the boom of online streaming services. Paradise looks at the copyright laws, licensing acts and in particular looks at the effects these services have had on all personnel in the music industry. Despite presenting her article with no bias towards a particular view, Paradise makes some damning statements.

She comments “ …while the digital music market is booming, both data and time have revealed that the current system as it exists will not provide a sustainable future for creators of content or for technology companies.” (Paradise, 2014) This statement intrigued me, and invited me to find out for myself whether the future will in fact be sustainable for artists. Profitability is perhaps one of the most critical aspects in that sustainability.

In order to examine my proposed question, I will conduct research analysing other scholarly articles as well as explore various websites for statistics or other crucial information to support my arguments. My primary research, will be examining data collected from surveys on the topic. These surveys will be completed over a 3 week period, and will involve 4 age brackets; 18-30, 31-40, 41-50, 50+. All surveys will consist of 4 questions with a set of answers appropriate for the question. These will also have an optional comments section on every particular question so subjects can expand on the given responses.

The questions I will be asking in the survey are:

  • When was the last time you purchased music content, either a CD or Itunes? – This will give me an idea if people are still willing to pay for content, even after the recent surge of music streaming services.
  • Do you use online music streaming services like Spotify etc.?- A chance to see their preference of platforms when it comes to listening to music.
  • Would you be more inclined to purchase music, knowing the royalty rates for artists are much higher than that of online streaming sites? – This question will see how empathetic subjects are about the future profitability for artists.
  • Due to this increased popularity of online streaming sites, do you see a sustainable future of profitability for artists? – This question will allow me to gain important data.

I hope to educate myself and raise awareness to others, in this investigative project. Certainly, I already have a vague idea of how these new developments in music streaming have affected income for musicians, however this is only knowledge I have heard in the media, and have accepted as true. After examining research, I hope to reach a valid conclusion about this stimulating area of study.



  1. Paradise, K, 2014, ‘Digital Music Streaming in the 21st Century: The Music Industry Becomes Radio-Active’


  1. http://www.fastcodesign.com/3048607/what-major-music-streaming-services-pay-artists-visualized