Spotify has been in the news recently, and it has not been good news:
- They’re pulling out of Uruguay because that country wants them to pay artists fairly
- They’re also laying off 17% of their workforce (over 1,500 people)
On the second item, I do wonder why they needed so many people. Like many tech companies, they got silly with hiring during the pandemic, so some cuts were inevitable.
But the layoffs, Uruguay demanding fair payment and Spotify essentially saying, “We can’t pay artists fairly and also survive” made me wonder if we’ll eventually reach a point where music streaming transforms from what it is now–a frankly shockingly inexpensive way to have what is essentially endless music–to something else. Some possibilities:
- All music streaming services start raising prices…a lot. Let’s call it The Netflix Effect because if anyone knows anything about regular price hikes, it’s Netflix. I think most people would grumble and keep paying as monthly prices climbed from $10-11 to $15. They’d get cranky at $17-18, but would still keep paying. $20 (or, let’s be realistic, what the companies would bill as $19.99) crosses a psychological barrier. We’re now twice as expensive as what people were used to. But still, I think few would bail. In fact, I feel they could raise prices to at least $30 before you’d start seeing people go without, and even those numbers would be small enough to be more than offset by the price hikes. I figure you’d need to hit around $50 a month to really get people to stop. And then we’d probably be looking at Napster: The Next Generation happening.
- Streamers that aren’t currently owned by big tech (like Spotify) would be gobbled up by big tech. People idly speculate about Microsoft buying Spotify, for example. Why would this happen? Because the music streaming business is so marginal (Spotify has over 200 million paid subscribers and still manages to lose money) that it’s only appealing to big tech companies that can subsidize the service, keeping it as a way to get or keep people in their ecosystem (people using Apple Music will buy iPhones to listen, etc.1Yes, Apple has an Apple Music app for Android phones, but I suspect it’s a tiny market vs. iPhone)
- A less likely scenario is companies giving up on streaming services altogether, and we go back to music as it was 15 years ago, when you listened to the radio (“Mommy, what’s a radio?”), bought albums on iTunes (iTunes, shudder) or went to a physical store to buy an actual spinning disc. I mean, most people would do the latter through Amazon, but you get the point. This would have a couple of interesting effects: I think people would buy far less music and, by that same token, listen to a lot less new music. People would get picky again, and more conservative, sticking more to known bands and performers. It’s even possible the album format could see a revival of sorts if it was no longer ridiculously easy to flip through dozens of songs with a few clicks or taps. Maybe those cheesy CD music compilations would become a thing again. But I think the odds of streaming music going away entirely is very unlikely, so this is really just playing out “What if?” scenarios for fun (but not profit).
Of the above scenarios, I think the first–price increases–is the likeliest. And we’ve already had some recently. I’m sure more are on the way.
