Why would artists favor free streaming?
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Why would artists favor free streaming? Ramadan Aly‑Tovar1 · Maya Bacache‑Beauvallet2 · Marc Bourreau2 · Francois Moreau1 Received: 18 July 2018 / Accepted: 25 June 2019 © Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract While streaming services are becoming the dominant way to consume recorded music, professional musicians remain divided in their opinion toward streaming, especially toward free (ad-supported) services that generate very low royalties. This paper is one of the first attempts to analyze empirically the drivers of the artists’ opinion on free streaming. Using survey data from more than 1100 French professional musicians, we emphasize that beyond their individual preferences, four main determinants affect the opinion of artists on free streaming: (1) Free streaming stands as a discovery tool that helps consumers to explore the music catalogue beyond stars and already well-known artists; (2) free streaming generates a positive externality on the live music market; (3) the contractual situation of the artist also matters, since the biggest recording companies obtain much more favorable conditions in revenue sharing from streaming services; (4) the opinion of artists is also shaped by the consumption habits of their fans. Keywords Streaming · Recorded music industry · Digitization
1 Introduction Spotify, Apple Music, YouTube and other streaming platforms are now the dominant gateways for music consumption. In early 2018, they accounted for 75% of total recorded music revenues in the USA,1 56% in France,2 48% in Germany3 and 1
https : //www.riaa.com/wp-conte n t/uploa d s/2018/09/RIAA-Mid-Year-2018-Reven u e-Repor t .pdf (retrieved November 13, 2018). 2 http://www.snepmusique.com/wp-content/uploads/2018/09/Bilan-march%C3%A9-musique-enreg istr%C3%A9e-1er-semestre-2018.pdf (retrieved November 13, 2018). 3 https://www.billboard.com/articles/business/8465986/germany-music-streaming-cds-market-share -bvmi-2018-report (retrieved November 22, 2018). * Francois Moreau francois.moreau@univ‑paris13.fr 1
CEPN, University Paris 13 & LabEx ICCA, 99 avenue Jean‑Baptiste Clement, Villetaneuse 93430, France
2
Telecom Paris, Institut Polytechnique de Paris, Paris, France
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Vol.:(0123456789)
Journal of Cultural Economics
46% in the UK.4 From the record labels side, streaming is praised for stopping the seemingly never ending decline that the industry experienced over the last 15 years. Hence, according to John Rees, VP of Warner Music (IFPI 2016): “Streaming has the potential to create a golden era for music, with multiple players establishing a truly competitive digital landscape that will benefit artists, consumers and the industry.” However, the artists’ opinion toward streaming is more controversial. Artists’ criticisms concern specifically the free (ad-supported) music services provided by most audio streaming platforms (e.g., Spotify) or video-sharing platforms (e.g., YouTube). For instance, Taylor Swift opposed her music to be available
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