I Feel It Coming – How Streaming is Changing Music Consumption

Over the past couple years, we’ve published two massive articles about the current state and impending trends of music consumption—my deep dive on the tough realities of streaming

7 years ago

Over the past couple years, we’ve published two massive articles about the current state and impending trends of music consumption—my deep dive on the tough realities of streaming platforms and Nick’s bullshit-free synopsis of Nielsen’s 2016 music industry report. While both of these pieces had minimal references to metal, the research and analysis we presented outlines some staggering changes to the entirety of music, changes that continue to expand and show no sign of slowing. And though it’s been just over a year since I channeled my B.A. thesis on streaming for my deep dive, Billboard published a story that compelled me to revisit the topic and write down my thoughts as soon as possible. The facts of the story are relatively simple—because Billboard now incorporates track streams into the sales figures they consider, The Weeknd‘s Starboy remained at #1 on the Top 200 for this week because it technically “sold” more albums than The XX‘s I See You, landing the British indie pop trio at #2 on the list despite selling more actual albums. This story stopped me in my tracks, as it poses an equally intriguing and worrisome question – are streams and purchases comparable, and what are the implications if Billboard thinks they are?

How many more “albums” did The Weeknd “sell”?

While my liberal use of quotes may seem petty, Billboard’s self-proclaimed metrics and means of measurement should welcome some skepticism, or at least curiosity. For starters, let’s get the actual album sales out of the way – in terms of “traditional album sales,” I See You put up better figures than Starboy, with respective numbers of 36,000 and 13,000 units sold. Now, there are a few points to consider before simply accepting this nearly 3-to-1 sales margin. To be fair to The Weeknd, Starboy was released on November 25 of last year, meaning it’s had nine weeks for its sales to dip while I See You had a boost from its release day bump. Of course, it’s also worth noting that The XX is considerably less popular than The Weeknd, and it isn’t particularly uncommon for a pop album to continue selling a high-volume of units well after its release day.

But neither of the two numbers I mentioned matter anymore. Despite The XX dominating in terms of “traditional album sales,” The Weeknd comfortably pulls ahead when the measurement becomes “equivalent album units,” with total “sales” of 61,000 for Starboy and 46,000 for I See You. Though these figures represent a three percent decline for Starboy, Billboard’s measurements keep the album at the top spot thanks to 10,000 track equivalent album (TEA) units and 38,000 streaming equivalent albums (SEA), compared to The XX’s 10,000 units across both these metrics.

What are the Measurements for these “Equivalent Album Units”?

That’s a great question, and I wish Billboard gave a straightforward answer. When I clicked the “How it Works” button at the top of the Top 200 Chart, this is the image that came up:

I’d read about this calculation back when it was first announced, but I was hoping Billboard would lead me to a separate page with a long-form explanation of how this actually works, not just a simple, eye-catching graphic. Thankfully, Billboard did provide some numbers for a simple math equation, being the number of streams (57.2 million) Starboy received and the resulting number of streaming equivalent album units (38,000). When you divide these two numbers, you get a result of roughly 1,505 streams per one SEA.

Now, if you’re like me, this formula invites heaps more questions than answers, with the primary puzzlement being how Billboard reached this specific calculation. But then again, this really isn’t a surprise; there are numerous streaming platforms that operate on several tiers, with some accounts being ad-supported while others require subscriptions at different prices. Yet, it’s still clear by the SEA figures for both Starboy and I See You that regardless of exactly how Billboard came to their final numbers, The Weeknd’s streaming presence continues to dominate, even if his sales are lagging behind.

But are Streams and Purchases Comparable?

That’s truly the central question of this article, and what I believe to be the primary issue behind everything I’ve just laid out in the previous paragraphs. Now, before I dive too far in, there’s one undeniable fact that should be noted—music consumption has changed drastically. As Nick discussed in his dissection of Nielsen’s annual report (link in the introduction), streaming revenue is continuing to outpace actual album sales, and for Billboard to deny that fact in their calculations would be a denial of the realities of how people prefer to listen to music. And furthermore, these figures purportedly represent actual streaming revenue instead of just volume, which is a crucial distinction. Streaming isn’t just putting numbers on the board for artists; it’s also putting money in the bank, and at an overall higher rate than traditional album sales.

But even if you believe Billboard should include streaming in their reporting (which I do), there’s also a debate to be had about how this inclusion juxtaposes streams and purchases. This may seem like a superfluous assertion, but there’s a difference between streaming an album on Spotify and buying that same album on iTunes. The most tangible distinction is profit accrued by the artist—The Guardian reports that while an artist will receive between $2.30 and $5.99 from a standard $9.99 album download (depending on whether they’re signed or not and the terms of their contract), those numbers drop drastically to a rate of $0.007 a stream for an unsigned artist and $0.0011 a stream for a signed artist. For an unsigned artist to reach this $5.99 cut, their songs would have to be streamed about 856 times on Spotify; for signed artists, that number jumps to just under 2,091 streams to match this $2.30 revenue share. And while streaming revenue has outpaced traditional sales overall, it’s important to take note of what can be deduced from The Weeknd and The XX’s streaming numbers, being the heavy skew of popular, frequently streamed artists reaping most of the spoils instead of the majority of the more indie/underground artists.

The Guardian

However, the deeper difference here is a philosophical rift between musical consumption preference, which really boils down to a conversation about how much weight Billboard should give to album streams. I’ll use myself as an example to help illustrate my point:

I pay $9.99 a month for Spotify, which could buy me one regular album on iTunes. However, to the surprise of no one, I stream way more than one album each month; hell, I stream more than one album before it’s time for my lunch break at work. I also purchase CDs and vinyl frequently and use Spotify as a try-before-I-buy tool to ensure I’m supporting the artists I’ve enjoyed listening to with some actual compensation. Unsurprisingly, not every album I listen to earns space in my record collection, and I’m comfortable admitting that the vast majority of my listening could be qualified as “passive.” What I mean by this is that my streaming habits are less about actively streaming and supporting specific artists as they are establishing which artists I’d like to support, and as a result, the majority of artists I listen to on Spotify never end up seeing any significant financial support from me.

Now, I realize that I’m an anomaly when it comes to music consumption; very few people my age (23) buy physical music at all, let alone at the frequency at which I do. And this is what solidifies my point—music consumption is trending away from active support and more towards passive listening. To be fair, this is mostly a result of the convenience of music streaming and not any deliberate action by most music consumers. But regardless, the data seems to suggest that if enough people passively stream an album—some of whom may not even be paying for a subscription—it will contribute enough streaming equivalent album units to block an album that was actively purchased and supported (like I See You) from being the top-selling album on the Billboard charts.

How Does Any of this Affect Bands like The XX?

There are two clear issues that I can pin down from this trend. The first of these is something I’ve already touched upon, being the way in which streaming revenue heavily favors artists that pull in a lot of plays. The Weeknd is a fantastic example of this—when you apply the aforementioned $0.0011 per stream signed artist rate to the 507,790,537 streams Starboy’s title track received thus far, his total artist revenue for this one song equates to roughly $558,569.59. That doesn’t even begin to account for the remaining songs on Starboy, which broke single-day streaming records from the moment the album was available.

However, when we actually do take a look at the rest of Starboy‘s track list, it reveals that these records have plateaued, as well as another example of what I mean by passive listening:

Spotify – 1/24/17

While I’m not trying to be the arbiter of what a “true album play-through” is, it’s clear from these numbers that the vast majority of people who streamed Starboy were doing so for its two hit singles, and not to listen to the album from front to back.  This isn’t anything new, of course—people have been buying singles instead of albums since the creation of the 45″. But we’re now seeing a new phenomenon of passive, hit-single streams being collected to hold weight against people who actively purchased and (ostensibly) listened to an album in full. To reference the numbers that opened this piece, 1,505 people from The Weeknd’s massive listener base passively streamed a disproportionate number of tracks from Starboy to create one “streaming equivalent unit,” and that counts just as much as someone from The XX’s smaller fanbase actively purchasing a copy of the album and listening to every single song, perhaps multiple times.

While this itself is troubling to me, bringing money into the equation only exacerbates the issue.  Most artists on Spotify won’t make as much in streaming royalties with their entire discography as The Weeknd made (and continues to make) on a single track. And with the trend of streaming over purchasing, this spells dark days for independent artists, particularly those that are unsigned. Whereas an artist could make a decent profit on album sales through iTunes, Bandcamp or other related platform, the shrinking popularity of purchasing music calls this opportunity into question unless independent/underground music fans continue to remain supportive of their favorite bans. Yet, as the popularity of streaming continues to grow and inform consumer expectations, the more likely it becomes that each new wave of music consumers will be less keen on paying for a digital or physical copy of an album when they can simply stream a handful of tracks on Spotify, either for free or for a small monthly subscription fee.

This brings me to my second and final point regarding the fallout of streaming dominance over purchasing music, and it boils down to the logistics of the industry. When a label sees revenue for an album pouring in, they couldn’t care less where that money’s coming from. Sure, both labels and major artists alike have been pushing back against streaming services since they launched. But as the realities of the industry begin to quell these grumblings, they’ll likely accept these trends and begin the quest to capitalize on the streaming-heavy success of artists like The Weeknd. The implications of this have a shallow, obvious consequence—as with the movie industry basing budgets on ticket sales rather than critic or fan reception, record labels will focus even more heavily on songs and albums that generate big streaming numbers and ignore artists that merely generate above-average “actual sales.” Again, as long as the money keeps flowing, why should major labels care where it comes from?

But now comes the second part of my concern regarding labels—the majority of funding for new music is going to be directed toward artists whose “sales” come primarily from passive listening rather than active support. It seems to me that we’re moving into an era where sporadically streaming albums on an ad-based or relatively inexpensive subscription-supported account is going to hold greater influence than actual album purchases. If streaming numbers continue to trend in the same, upward direction, then this hypothesis doesn’t seem all that far-fetched. And when neither fans nor major labels are actively supporting anything but massive pop artists that churn out multi-million stream hit-singles, it’s going to be even harder than it already is for the smaller artists we love to stay afloat.

While it’s common for an underground artist to have a day job alongside their art, further diminishing sales will deal a blow to either the smaller label they’re signed to and/or their own ability to afford something that’s unfortunately becoming less of a part-time career venture and more of an expensive hobby. Of course, musicians will always create music regardless of the level of profit they can expect. But when you have to rely on a full-time job to live, there’s only so much time you can take off to write, record and—especially—tour behind your music. And while this won’t eradicate underground music completely, it will make part-time musicianship more of the norm and further complicate an already challenging creative set-up.

So…What Now?

I don’t know. As I typed this, I finished listening to Akhyls‘s The Dreaming I on Spotify and then put on the vinyl copy of Battle Trance‘s Blade of Love that I bought directly from their fantastic label NNA Tapes. Clearly I see the value of both streaming and purchasing, and I’m the first to admit that not all streaming is passive and can absolutely lead to active support. But as long as streaming continues to dominate (and there’s every indication that it will),  people like me are going to become more and more of a relic of the past, and my fear is that artists like the two I just mentioned will suffer the consequences. Unfortunately, there’s nothing I can offer in terms of a solution; as I mentioned above, streaming is extremely convenient, and most people who’ve switched to mostly or exclusively streaming music instead of purchasing it have all the incentive to continue doing so.

I used to say this same mantra all the time when I talked with people about my thesis on streaming services—artists and labels need to find a way to monetize music despite the fact modern consumers don’t want to pay for it anymore. But the more time passes, the less options I see for achieving this goal to any meaningful degree, let alone to a level comparable to where music sales used to be. All I can do is support the artists I love and advocate to my friends and family that they do the same. Other than that, I find myself feeling a mixture of curiosity and concern about the exact impact the future of music consumption will have on the health of my favorite artistic medium.

Scott Murphy

Published 7 years ago