To put this rate in context, an artist with 1 million streams would earn $2000 - hardly enough to live on. That means paying artists as little as possible - about 0.2 cents per stream. But under the hood, the streaming business model is ‘always cut costs’. Streaming services like Spotify charge low prices to listeners. The modern music industry runs on the Walmart model. That’s good for Walmart, but bad for sellers.
To achieve this cost cutting, Walmart uses its power to force sellers to lower their prices. But its actual business model is ‘always cut costs’. Yes, Walmart’s slogan is ‘always low prices’. Think of this cost-cutting strategy as the ‘Walmart model’. Instead of hiking prices, they cut costs. Sometimes oligopolists use their power in the reverse direction. But oligopoly doesn’t always pan out this way. In 2019, the Big Three music streamers (Spotify, Apple, and Amazon) claimed 69% of all streaming revenue.īecause big firms can use their power to hike prices, we usually think of oligopolies as being bad for consumers. The situation is nearly identical for music streaming. In 2018, the Big Three record companies (Sony, Universal, and Warner) raked in 68% of all music sales. In the 21st-century music industry, the vast majority of revenue is controlled by a few corporations. Instead, ‘corporate execs and lawyers’ run the show. Or rather, what it used to be like 50 years ago.
The meme is actually a misquote, but it’s still a fair representation of what the music business is like. Thompson’s meme about the music industry. The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs.īrowse the internet long enough and you’ll eventually run across Hunter S. SeptemOriginally published at Economics from the Top Down
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