via Mike Windle/Getty Images
via Mike Windle/Getty Images

After more than a decade of declining sales due to overpriced CDs in the ‘90s, the post-Napster spread of illegally torrenting and downloading music, and the shift away from digital music stores, the music industry appears to be bouncing back. Much of that success can be attributed to the streaming industry.

The industry’s newfound bullish-ness isn’t unwarranted, but there is already a sense of concern about this streaming-first future. Jimmy Iovine, the head of Apple Music, told Billboard about the myriad of issues that are facing the streaming music world, even in light of so much growth. In particular, he wanted to note the power Amazon could potentially wield in this space:

“Amazon sells Prime; Apple sells telephones and iPads; Spotify, they’re going to have to figure out a way to get that audience to buy something else. If tomorrow morning [Amazon CEO] Jeff Bezos wakes up and says, ‘You know what? I heard the word “$7.99" I don’t know what it means, and someone says, ‘Why don’t we try $7.99 for music?’ Woah, guess what happens?”


Iovine, along with the heads of most record labels, believes streaming will become sustainable if people actually pay for their music. That’s what Stu Bergen, the CEO of global commercial services at Warner Music Group, said this week at the Slush Music conference:

“The streaming story is a continuing positive story. I would caution us not to get drunk on two years of growth. We have to stay vigilant, continue to drive the adoption of paid streaming subscription.”

The statements from these two men show that while the industry may be growing, there is a fire under them to not get complacent. Still, their obsessive desire for a primarily subscription-based music ecosystem reflects the industry’s bad habit of stripping choice from consumers.

We’ve seen this before: in the ‘70s when albums prices increased dovetailed with the oversaturated disco era, or the ‘90s teen-pop era, when the industry made record profits on the back of overpriced CDs. In return, the ‘70s saw massive cuts across record labels and the ‘90s saw drastic drops in CD sales that simply couldn’t just be blamed on illegal downloads.


But right now, streaming remains prohibitively expensive. The average U.S. music consumer spends around $156 per year on music, and the $10-per-month U.S. Spotify subscription would add up to $120, or nearly 80% of their yearly music budget.

The high price barrier, when there are so many free options in the music marketplace, is a chief concern of the industry. But instead of trying to create a diverse set of business models, streaming executives appear to be doubling down on paid subscriptions rather than opening up more ways for fans to consumer music through non-subscription means. If the days of Napster are long in the past, the industry still cannot grasp another way to engage with fans without also draining them of every last penny.

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