Streaming Music, Circa 2014

Headphone Michaela Kobyakov

When the courts in the United States shut down Napster in 2001, many picked up the cry that “music should be free.”

Granted, the “moderate” version of the argument that music should be free first acknowledged that musicians write and play their music, and are entitled to be paid for the recordings they make for the public.

“But,” the argument continued, “we the people who love those recordings [catch that ‘we the people?’ — from the Gettysburg Address?] are willing to buy some albums, and even pay full price for them. But we can all have a lot more total music at a reasonable price if, after we buy an album, we ‘own the music’ and can exchange the songs with our friends and acquaintances as we see fit. Music should be free!”

The slogan “Music should be free” wasn’t “coined” in 2001, the year Napster was shut down, but it became widespread in response to the closing of Napster by the courts.

And the meaning of the slogan “Music should be free” varied, depending on who was saying it. To some it meant “we should be able to trade the music we own with others” — but to the more militant, it meant “we should never have to pay for music. Music, like the air we breathe, should be free!”

The recording industry’s objection to Napster, of course, was that Napster let people go completely beyond casual trading with their friends. If you owned “A,” and wanted “B,” you could log onto Napster and find someone somewhere in the United States who owned “B,” and wanted “A.” Then the two of you could copy each other’s recordings with no payment at all to the copyright owner.

That kind of trade, of course, was an obvious violation of the copyright law, and the courts shut Napster down in March 2001 for arranging the wholesale copying of music without permission of — or payment to — the copyright owner.

And then came iTunes.

After the courts shut Napster down in 2001, music sales remained lackluster and generally in decline, and the Recording Industry Association of America (RIAA) appeared uncertain how to proceed.

Then someone from another industry, Apple Computer, stepped into the “leadership vacuum,” signed agreements with the bands and performers, and began selling individual songs for 99 cents a track, giving consumers a way to get music without buying the more expensive complete album.

And can we say that, because Apple made buying single tracks easy just two years after the courts shut down Napster, Apple helped move the recording industry a little closer to the demand that music be “free?”

Yes, perhaps, in this sense: The widespread call for “free music” in 2001, in reaction to the closing of Napster, was an “angry demand” more than a well-thought-out proposal that music should, somehow, be available “at no cost to the consumer.”

Apple, by making individual tracks a new industry standard, saved many consumers the expense of buying entire albums. Where Napster once provided an unlawful “no cost” way of obtaining music, Apple successfully marketed the mobile digital player, and gave consumers a “lower cost” way of buying just the tracks they wanted.

And now — 13 years after the courts shut down Napster — is streaming moving us closer still to music that is actually free?

In the news this past week were some startling figures from Nielsen SoundScan covering music sales in the U.S. in the first 6 months of 2014.

SoundScan figures released Thursday, July 3, show 70.3 billion songs streamed in the U.S. in the first 6 months of 2014. SoundScan says the number is 42 percent above the number streamed in first-half 2013.

Why the increase in streaming in 2014?

One factor in the sharp increase in streaming this year is a sudden and dramatic decrease in digital downloads (sales), other SoundScan figures show.

At the Apple iTunes store, downloads declined 6 percent in 2013, from the year before. The 2013 decrease was the first time Apple suffered a decline in downloads since it began selling songs at 99 cents a track in 2003.

The 2013 decline was, therefore, a sudden and surprising reversal of what had been a slowing, but nevertheless unbroken string of yearly increases. And the decline at the iTunes store is continuing into 2014, with downloads in the first 6 months of this year down 13 percent from the first 6 months of last year.

The SoundScan figures released July 3 also show that 120.9 million albums were sold in the first 6 months of 2014, a decline of 14.9 percent compared to the first 6 months of 2013. Taken separately, sales of CDs were down 19.6 percent, and digital downloads were down 11.6 percent, compared to the first 6 months of 2013.

But the most important reason streaming is up so dramatically in the first 6 months of 2014 — (up 42 percent to 70.3 billion songs) — appears to be that streaming is often free to the consumer. The royalty on one streaming of a single song can be less than one cent — and many kinds of streaming, especially of older material, involve no royalty at all.

Advertising often pays for streaming that is then free to the consumer (and is, of course, accompanied by the advertising) — and there are sites that exist in whole or in part to provide free music streaming. Some sites provide free streaming as an inducement to subscribe — and some provide free trials.

We can’t know, of course, where recorded music will go next — and we can’t know whether, or when, recorded music will be largely or entirely “free.”

The SoundScan method of tracking sales is the official method of tracking sales of music and music video products throughout the United States and Canada. For additional information, see Nielsen_SoundScan.com.