The music industry
Beliebing in streaming
Record bosses now hope that online streaming could become a big enough business to arrest their industry’s long decline
At the headquarters of Pandora, an online-radio firm, in Oakland, about a dozen headphone-clad analysts fill in a long questionnaire as they listen. They rank whether a song’s mood is “joyful” or “hostile”, the vocalist “breathy” or “gravelly”. They note whether they can hear electric guitars, lutes or bagpipes. Their ratings help to shape algorithms that push music to the service’s 76m users.
Pandora is in the vanguard of a revolution in which ever more consumers are streaming music over the internet to their smartphones or computers, instead of owning collections of songs. For the first time since Apple popularised the paid download in 2003, the record business is changing key again. From wax cylinders via vinyl, cassettes and CDs to MP3s, it is undergoing another format shift – maybe, some in the business muse, its last.
Streaming services give music-lovers access to millions of songs, but the services are not all alike. Online-radio versions, including Pandora and Apple’s iTunes Radio, choose what consumers hear, and the firms make their revenues through advertising. Others, such as Spotify and Deezer, let customers select songs from a catalogue of 20m-30m, charging premium subscribers a monthly fee. Free services that stream music videos, such as YouTube, also get plenty of play. All the variants pay the record labels some fraction of a penny each time someone clicks on a song.
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