Why music streaming will collapse

Hurry up the presentation is starting...

* A disheveled man in a tweed jacket that reeks of marijuana steps into a dimly lit conference room. He fires up an old projector with a title slide that says “THE END IS NEAR”. The room is 5 degrees warmer than it should be.*

Good morning.

Grab a coffee everyone, we’re going to get started…

*The man smiles weakly and clears his throat.*

The streaming platforms have made a massive mistake….

And I, just a little lad from Scranton, PA, am going to show you exactly why that mistake will collapse the streaming industry.

*Someone coughs, a tumbleweed somehow blows past even though we’re indoors*

You see, when Spotify (and friends) first emerged in the late 2000’s… it signaled a new era for music.

Yes, it basically killed physical music sales… but it also lowered the barriers to entry for millions of artists to participate in an industry that, until then, relied primarily on exclusion to fuel their business.

*Cue patriotic music*

These streaming platforms, and the rise of independent distributors like Tunecore, Distrokid, etc, promised an era of limitless creation inside a new, democratized music industry.

Instead of a handful of labels picking winners and losers, these new tools put the people in the drivers’ seat of their own music careers.

*Patriotic music swells. The man is gently sweating*

Yes, music “sales” were dead… but the doors were now open for anyone to participate.

And that was a beautiful thing.

But Spotify (and friends) have now fallen into the same trap that has led to the downfalls of countless other corporate giants in every industry:

They’ve turned their nose up at the very people they were meant to serve.

And no, I don’t mean this in a “hey you guys are mean” whiney-kind-of-way.

I’m speaking from a purely capitalistic perspective here.

If you create a platform that democratizes music creation for artists and then (almost immediately) treat those artists like absolute dogsh**, then you’ve created a business that is guaranteed to fail over the long term.

Let me illustrate this with an example:

---

Imagine for a moment that it’s Friday night.

You and the girls (or the fellas), are a few drinks deep, and you’re waiting in line at the hottest new club in town.

Rumors are swirling that some of the biggest celebs are inside, and there’s a palpable buzz of anticipation.

After an hour of waiting, you notice that the line has barely moved….

Every time it looks like a group is going to be let in, a large black SUV pulls up and lets out a group of VIPs that circumvent the line and walk inside.

The line grows. Another hour passes.

A handful of folks make it inside…. but it’s mostly just more VIPs from the mysterious black SUV’s.

Eventually, the anticipation turns to the all-too-familiar resignation… you’re not getting in.

You never were.

You head to the dive bar next door for a beer. A few folks hold out hope, but eventually they too leave the line and go somewhere else.

And with no line outside… the VIPs eventually stop showing up.

(After all, it’s only cool to be a VIP if there are regular P’s waiting outside.)

---

You see, once folks realize that “the line” they’re waiting in is fake, they stop showing up.

Now, this process takes a while, cause every time someone leaves the line, there’s an impulse to say “my odds just got better”…

But when you realize that the club has no interest in ever letting you in, eventually reality sets in, and you begin to look for alternatives, however dire they may seem.

And I’m sorry to say but honey, the club ain’t letting you in…

How do I know?

To beat my analogy to death, this is the equivalent of the bouncer at the club not only rejecting you, but slapping you and pulling your pants down too.

According to DJ Mag, 86% of music on streaming platforms had less than 1000 streams in 2023…

Now you may be asking:

Michael, sweetheart, this genuinely makes no sense… why would Spotify tar + feather the majority of their own creators?

Well, unfortunately I can answer this question.

Surely you’ve heard the phrase “if you aren’t paying for the product, you are the product”.

We’ve lived in an era of “free” platforms that “empower” creators, but you’re savvy enough to understand that nothing is free.

(Again, I’m not saying this in a jaded way, I’m simply stating a fact.)

When a company isn’t making money from you directly, they LITERALLY HAVE TO make it from somewhere else.

And the moment that happens, your interests are no longer aligned with theirs.

For a time, they can gaslight you to believe they are aligned, but eventually they’ll show their hand.

Eventually, they will be forced to choose between their users, and the actual people paying their bills. And Spotify is, NATURALLY, choosing the latter… which marks the beginning of the end for this business model.

*Dabs forehead. Half of the audience has left and someone is snoring in the back row*

Now…. this isn’t just theory, it’s actually happened in other industries.

Hold on to your pantaloons, we’re gonna kick this up a notch.

Take a look at cable news.

(Before you get all huffy and click out of this article, stick with me for one more moment.)

For decades we believed THE NEWS was free and fair.

But let’s take a non-partisan issue like the Opiod crises, one of the most tragic and devastating events of the 2000’s.

How, on God’s green Earth, does something like that happen for DECADES without “the news” reporting and exposing the literal destruction of the millions of lives across the country?

Let’s take a peak…

Again, the news is “free” because it sells advertising… which means actually reporting the news is a secondary priority to making sure their advertisers are happy.

This is just one of many ways the cable news networks have misled and mistreated the very people they were meant to serve, and as a result, most of them are teetering on complete collapse.

And those who saw this coming (podcasters, newsletter writers, community builders, etc) have reaped the rewards of moving on this collapse early.

…..

*deep breath*

…..

Look.

Here’s the reality.

These corporations have a “FIDUCIARY DUTY 🤢” to maximize profit.

Whether or not you agree with that is a separate discussion that I’m happy to have…

But what you need to understand is that if a corporation isn’t directly making money from you, then they will never, ever, never, never, ever, put your interests above the ones of those paying them.

And while Spotify (and friends) claim to be for the “little guys”, it’s simply not the way their business model is designed.

Yes, the technology is capable of democratizing the music industry… but it isn’t.

The top 1% of artists control the streaming platforms.

And the top 1% of artists are all owned by the same labels that have always controlled the industry.

The streaming revolution didn’t change the industry, it just changed its appearance.

But, if you have a shred of respect for yourself and your art (and you should)… then demonetizing artists with less than 1000 streams MUST BE the last time you allow the bouncer to spit in your face before you stop waiting in line…

Stop gaslighting yourself.

Stop waiting outside a club that deliberately embarrasses you.

Take a moment to grieve for the wasted time… and then, start building somewhere else.

What we lack in resources, we make up for in sheer numbers.

If the top 1% of artists account for 90% of streaming revenue, then 99% of artists are in the same boat as you.

Stop competing with each other and start building together. Build communities, spread awareness, use whatever skills/resources you have avaialable instead of sitting on the sidelines shaking your fist at the sky.

That’s the very reason this SubStack exists, and why we have nearly 3,000 subs who support the mission of our education-funded record label.

But one SubStack isn’t enough.

If you want to be an activist and support artists, complaining isn’t enough. You need to genuinely start building some structures that can help artists, and that might mean putting YOURSELF on the back burner while you do that.

The streaming platforms have overplayed their hand, and if we’re bold enough to band together and build something better, we can build a music industry that…. at the very least…. doesn’t make us feel like utter and complete sh**.

And wouldn’t that be nice?

I’ll see you in the (new) club. 😎

This concludes my presentation. Grab a scone on your way out.

Michael from MAD Records