Posted: May 29, 2018
Category: Music Streaming
**Guest post written by Cameron of The Singer's Corner, a great place to learn a new approach to singing, receive tips to make you better, or learn ways to be the best of the best.
"One of the major goals of any entrepreneur or an aspiring businessman is to build a sustainable business. But what exactly is a sustainable business? In the present context, business sustainability refers to the overall business model and the decisions taken in the realm of financial and social aspects. Building a sustainable business is all about building a business with a long-term perspective in mind. Building businesses and ventures that offer short-term monetary benefits are relatively easy and require less thought and efforts into action. At the same time, sustainable business models have a very high capability to make money when compared to the non-sustainable ones.
Before we get into the part whether music streaming businesses are sustainable or not, let us briefly know the story of music streaming services. Much before these music streaming services like Spotify, Apple Music and Prime Music were in the picture, the CD records and their sales were the only way people got to listen to their music of choice on demand.
The advent of music streaming began with Napster. Napster made use of peer-to-peer exchange method for sharing music files and streaming them. This new method sent ripples of shockwaves all across the record companies and artists. With this peer-to-peer sharing system, people started sharing music illegally without paying for the music they listen. After two years, Napster lost the legal battle to the record companies and artists for copyright violation. The end of Napster’s era and the beginning of Pandora Radio almost happened simultaneously. Launched in 2004, Pandora radio started off as a music streaming service which had automated music recommendation and internet radio services. Though it started initially as a paid service, it then became free and made its revenues through advertisements. As of today, it is a free music streaming service.
After Napster and Pandora Radio, the entry of Spotify in 2011 followed by Apple Music in 2015 happened. As of now, these both services have been the most successful music streaming services ever. From a culture where people were used to buying things and owning them, they have slowly evolved to purchasing their access to them but not owning them. Initially, people owned music CDs; now they’re purchasing their access to these music tracks.
Another important development in the field of streaming services, in general, was the rise to prominence of YouTube. YouTube has rapidly grown and established itself as one of the most used streaming service ever. Though YouTube primarily is a video streaming service, people use it equally for audio streaming as well. Despite the fact that YouTube doesn’t help you in discovering new music and keeps showing the same songs you’ve listened to, many people use YouTube for music streaming. A recent study said that YouTube has more music streaming than all the other platforms combined.
Now, when it comes to the sustainability of the music streaming services, two things are to be understood. One, if they are purely streaming music and are charging based on the advertisements, and are not connected to any product (like a phone, for example, iPhones and Apple Music), then they are not sustainable, and there is little to no chance for those services to make it big. Two, if the streaming services produce unique content alongside streaming other artists music, then they can be sustainable. The main issue with music streaming services is the fact that the amount of money made by the artists is lesser when compared to the CD and record sales. At the same time, YouTube also underpays the musicians when compared to music streaming services. Therefore, in this perspective, music streaming services have the edge over YouTube.
However, for these streaming services to succeed, they mustn’t purely depend on the music by other artists. By building programs, shows and creating content of their own, they can capture a user community and keep them in a loop. Like how Netflix produces its originals, these music streaming services also need to produce their own original content. Doing so will lead to sustainability in the long run. A music streaming service that goes by the name of Saavn creates its own podcasts and exclusive interviews that are aired every week through its audio streaming app. Apart from that, this company also has two services. One is the regular method of streaming music and listening to advertisements in between. Two, buying their premium service and going ad-free. Also, by having a large group of people subscribing to your services is essential. Retaining the users that come to a particular music streaming service also plays an important role in the success and sustainability.
Business models like these have the capability to sustain. Without a unique selling point and differentiating their services, music streaming cannot become a sustainable business. Creating original and unique content while offering competitive pricing plans alongside a top-notch UX and UI will make music streaming sustainable. By following the footsteps of successful streaming services and understanding their USP, one can build sustainable music streaming business. On the whole, music streaming business can be sustainable, only if built in the right way."
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