The success of streaming transforms the industry’s revenue outlook, and it will provide a safety net for addressing two other problems plaguing the music business: culture and loss of engagement.
The culture problem is the persistent conservatism/pessimism that were the inevitable result of a long, brutal downturn. From where I sit, it is time to trust the success of streaming and take advantage of the growing cash flows it will produce. Don’t harvest streaming! Use a portion of growing streaming revenues to ramp up experimentation with new platforms and technologies. Sow seeds for future growth.
The other big problem for the music industry is loss of engagement. In the era of LPs, consumers actively engaged with recorded music. They put an album on the turntable, read the liner notes, rolled a doobie, and focused on the music. Engagement declined with transition to CDs and evaporated with MP3, as music became a soundtrack for other activities. There is nothing inherently wrong with being a background activity, but it is less valuable than being front and center. This helps to explain why concert ticket prices have risen so high in recent years. Concerts are the last area where music demands and rewards deep engagement.
And when the background is not constant