Playlists and Payoffs: Streaming Opens Up Unorthodox Revenue Streamson July 8, 2015 at 8:34 pm
It’s fair to say that nobody knows quite where to place streaming media in the music and movie business models.
From artists railing against certain services as they embrace others, to studios that strive for wider digital availability that still respects global markets, the transition to always-on digital markets has been challenging to say the least.
Streaming music and movies has developed quickly, from a minor market segment of tech-savvy users a few years ago to an almost mainstream activity today. With last week’s introduction of Apple Music, the big guns are truly out and the market is saturated with streaming options.
Movies have lagged behind their audio counterparts to some extent, largely due to more complex licensing arrangements and the strain that streaming video places on a connection, but no one can deny the success of Netflix, Hulu, and their big brand competitors. We’ve written on many occasions about the next evolution of online viewing and it now seems very near indeed.
With the services almost established, what remains is for the business models to prove themselves and the revenue streams to shake out those that are the real deal. As this process takes place, there are some unexpected sources of income starting to emerge.
Playlists and Payoffs
In the battle to establish a dominant streaming music service, curation has been touted as an important feature. Pandora, for all of its questionable antics with artists, is often cited as the best example for streaming radio services, while on-demand platforms like Spotify and Beats, the precursor to Apple Music, have duked it out to say they have the best recommendations engine.
In between all of this, a class of professional curators has emerged, creating playlists with large followings and positioning themselves as invaluable filters for the mass of entertainment content we now have available at the push of a button (or the tap of an app). The income that comes with that intermiary status is still open to interpretation and, potentially, up for grabs if playlist creators and other curators can seize the moment.
A debatable leader in this world of middle-man income is YouTube. With its questionable mixture of advertising, playlists and piracy, Google’s sparkling video platform makes money for everyone, although what trucks through to the original artist feels like a pittance compared to the amount of content consumed there.
Despite obvious concerns over its content legitimacy, YouTube may provide a kind of example that more targeted platforms like Spotify and Netflix can use to make more money, for themselves and creators.
From the opposite angle, YouTube is finally facing a challenge to its video advertising dominance, from none other than Facebook.
The social network has worked hard to develop its native video content over the last two years and has succeeded in snatching a portion of original uploads away from its rival.Now it needs to translate that content success into dollars, and has built some significant partnerships to help it compete. Once again, the value in being the filter between a world of entertainment – or a world of advertisers – and the end consumer begins to throw up a lot of possibilities to make money.
Despite all of these new income sources, however, it remains direct payment for music and movie services that is most attractive to artists.
Whether it’s stumping up a subscription fee for streaming content or the older pay-to-own model, getting fans to spend money directly on content they want inevitably pays more for creators than pennies from advertising dollars or residual income passed on by playlist curators. The Trichodist regularly does a great job of telling us why free music is not a model that can sustain itself.
So while all the revenue sources in the world are welcome, it’s the premium subscriptions and fair rates for songwriter royalties that we really want to see flourish. When that becomes a reality, we’ll be happy to curate a playlist of those who helped make it happen!