The Collegian
Tuesday, July 07, 2020

The 2016 Music Series: The Streaming Wars

Will we ever have a music streaming war like 2016 again?

<p><em>Graphic by YounHee Oh, The Collegian</em></p>

Graphic by YounHee Oh, The Collegian

Editor's Note: The views and opinions expressed in this article do not reflect those of The Collegian.

In the fall of 2016, I switched from Android to iPhone, because of Apple Music. Already that year, Apple had exclusive albums drop on its service from huge artists including Drake, Chance the Rapper and indie darlings The Avalanches, and yet to come were albums from Travis Scott and Frank Ocean. 

These albums didn’t always stay exclusive. Some of them were on Spotify after a few weeks, maybe a month, but it was a strategy throughout 2016 from Apple to incentivize users to migrate away from Spotify and to its own platform. 

Tidal, owned by rapper Jay-Z, was also in an arms race for exclusive content, aided by his wife and friends. It kept Jay-Z’s discography exclusive to Tidal until this past December and exclusively released Beyonce’s "Lemonade" in April of 2016 — which stayed exclusive until just last year. Jay-Z’s good pal Kanye West initially released "The Life of Pablo" exclusively streaming on Tidal. 

Other artists tried to change the music industry's business model away from streaming altogether. In late 2015, Adele announced she would not put "25" on Spotify or any other services, instead hoping that people would purchase her album, an idea that already feels antiquated in 2020. Taylor Swift also initially withheld "1989" from Apple Music in 2014 and wrote a letter to Apple Music asking it to change its free trial policy, which would not pay artists, labels, etc. during customers’ three-month-long free trial. 

The landscape of popular music, at least among the highest-profile artists, seemed like it was becoming more scattered. In 2016, it felt possible that music streaming would mirror movie and television streaming services, such as Netflix, Hulu and Amazon Prime. Each service would have exclusive content to differentiate themselves from one another and incentivize avid music fans like me to buy their product. 

I would not have bought the iPhone 6S that I still use today if I didn’t think that the trend of Apple Music getting albums early — if not completely exclusively — would continue. It just made sense for the biggest artists to operate this way. Artists got some more cash from Apple for staying there, and Apple got carrots to dangle in front of customers like me. 

The losers, I thought, would be the consumers who wanted all their music in one place, which was the initial promise of Spotify. They even got the Beatles in 2015! It was an event back in 2010 when the Beatles first put their music on iTunes, so when they came to streaming it felt like any relevant artist from the past or present would follow. 

The real losers of the exclusive streaming model weren’t just consumers but also the music labels. In an era where music is devalued to the point of paying just $9.99 a month for ad-free listening from an endless library of music, the margins can be thin for record labels. 

Exclusives lost popularity quickly, because those first few weeks are essential to an album’s hype cycle. In September 2016, the Wall Street Journal was already reporting on how the trend could be fading. Exclusives were too “erratic,” and “confusing to fans,” Stephen Cooper, CEO of Warner Music Group, told the Journal. 

It wouldn’t work for labels to keep something like "Views" or "Lemonade" exclusive, even for a limited time, because Spotify was the king of streaming, and the fight wasn’t particularly close. Spotify had 40 million paid subscribers to Apple Music’s mere 17 million by September 2016, and in late 2019 it boasted passing the 100 million mark for paid users. 

Plus, Spotify maintained a unique free, ad-supported option, which offered artists less in royalties but helped them acquire new listeners. Spotify still pays out much less than Apple Music and other pay-only services, but their much larger base helps curb that payment gap overall. 

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All this is to say the economics of the music industry was in great flux in 2016. Streaming was a new music format in the same way that tapes were in the '80s or CDs were in the '90s. Streaming could boost the sales of artists’ back catalogues in the same way that CD re-issues were able to do, but these boosts only worked if the records were everywhere. Because each stream gives artists and labels such a small royalty (estimated around $0.003 per stream), they need as many possible streams as possible. 

Even with that higher Apple payout and Apple’s ability to advertise exclusive or early albums on their platform, artists' and labels' bottom lines still benefited more by being everywhere for a little less money per stream. That’s where the economics remain today, and streaming continues to take up a larger percentage of the market for the music industry. Up to 80% of the music industry's revenue comes from streaming, according to estimates from the Recording Industry Association of America.

But the true tipping point for the end of the exclusive album era may have been Frank Ocean and his independent release of "Blonde."

Ocean was in a unique position as an incredibly popular artist who was fed up with his record label and saw an opportunity after a long layoff to keep all his own profits. He released "Endless" as a visual album on Apple Music (which remains hard to find anywhere else). That release reportedly fulfilled his contract with Def Jam, so "Blonde," released just after, was a fully independent release. The copyright read "Boys Don’t Cry," Frank Ocean’s brand new independent music label. 

Ocean essentially used Apple Music as a label, because the things that a label primarily helps an artist do during an album release are advertise and distribute the product. Streaming services can do that all on their own if they want to, but Universal Music Group CEO Lucian Grange quickly saw what was happening and tried to squash it. He sent an email to his fellow company executives writing to end all exclusives with music streaming companies.

It’s rare now that any major release is exclusive to any one streaming platform, and surprisingly, this change has been good for all involved, except maybe Apple Music and Tidal. Streaming generally still makes finances tight for a lot of artists who aren’t at the popularity level of Drake, Beyonce or Frank Ocean, but it doesn’t seem to be going away anytime soon either. 

Ocean showed the potential power of streaming services as a label-adjacent platform, but as of 2020, few high-profile artists have followed his trailblazing. (And we’re still waiting on his next album drop, whatever form that may take.) 

Contact opinions and columns editor Conner Evans at conner.evans@richmond.edu.

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