Fans will always find the path of least resistance. In the early 2000s, that was Napster or LimeWire, and then it was YouTube or Pirate Bay and increasingly, it’s Spotify or other free-tiered systems. Pandora’s box is open and there’s no putting it back in. But, that won’t stop some from trying.
Apple officially announced its music streaming service Apple Music at WWDC this week, marking not only another competitor in a long line of music streaming services, but also a marked attempt to dismantle the freemium model that at least 60 million monthly Spotify users have become accustomed to.
Apple comes with a lot of advantages with its debut into the market. In the U.S., iPhones are by far the most popular smartphone out there and, as Apple has demonstrated with U2’s most recent album, the company has the ability to natively place its new app on your phone whether you want it or not.
With that kind of power Apple is hoping to convert some of those millions of free-tier users into paying subscribers through the convenience of Apple’s device synchronization and some star-studded names controlling the operation including Drake, Dr. Dre and Jimmy Iovine. The service will also support a 24/7 human curated Internet radio station and some sort of social element named Connect, which many people (including myself) have little faith in its success.
This could be enough to convince some, but without some sort of freemium model it can’t work.
Spotify usually tops the list of most mentioned music streaming services in the media, and for good reason given the mediocre success of the other contenders: Rdio, the now defunct Beats Music, Tidal, Deezer, Rhapsody, Grooveshark and if we’re lucky they mention my personal favorite Google Play Music. The case is still open on Apple Music.
But if we’re being real, YouTube is the dominant force in the market right now. YouTube itself has more than a billion active users a month. Some stats show that 38 percent of those users are watching music videos, which comes out to 380 million users a month. That’s far and away greater than Spotify’s 75 million active users.
I throw out these statistics to say there’s no erasing free music. If you abolish Spotify’s freemium model 60 million people will flock to YouTube or worst yet, piracy. While there’s no getting rid of free music, I do think there’s room to reform and make a new freemium model that works to the advantage of artists.
Google has the potential to make the dominant, all-in-one music platform if it gets a couple of things right, the first of which is user created music. YouTube made its dominance in video streaming from user created content. YouTuber’s get hundreds of millions of views a week and have spurred on wildly creative channels from cooking shows to reality shows that make regular TV a bore. Just maybe it can do the same with music.
SoundCloud is by far the best place to find completely unheard of artists. My Facebook timeline and Twitter feed are constantly flooded with friends peddling their latest homegrown recordings. But, let’s face it SoundCloud’s interface sucks. It’s nearly impossible to find anyone good beyond my small circle of friends and the explore tab these days is generally filled with the top charting hits I can find anywhere.
If YouTube could tap into this community and make a playground for artists that is easy to explore and gives them even a little bit of advertising revenue, it’ll have a massive success on its hands (Apple is attempting something along these lines but I fear it’s doomed to fail because there’s no free tier).
A new freemium model needs to account for the fact that artists simply aren’t going to make a ton of money off of the physical product. Artists need to get used to touring a lot and jump on every opportunity to license their music that doesn’t completely sell their soul away. That’s where the money is today and going forward and our streaming music services can help us.
YouTube is launching a new artist page function to the site in which self-made artists can better track their data. This means tours can more easily be scheduled around geographic data and artists can be more in touch with their fan base. Musicians are going to have to rely on a small core group of fans to keep them going in the music industry. Artists have to rely on the ability of fans to track a tour, buy tickets to a show, buy merchandise, buy special vinyl or even donate money to a new album. The YouTube artist page has the ability to make all that and more happen and I hope they follow through with it.
Freemium doesn’t have to mean the artist isn’t getting paid, it means the money is going to come from different places. Free music can actually be extraordinarily valuable to an artist because it grows that fan base that will potentially buy tickets or merchandise. We just need the tools to be there and I hope Google can make it happen. Even if Google can’t there’s no point in trying to reverse history, you can only move forward.