After coming out again exclusive streaming releases a few months ago, major labels have reversed course slightly — now, according to reports on a revised deal between Universal and Spotify, some albums will only be available to paid subscribers for a period of time. Warner and Sony are expected to sign similar deals soon; presumably the intent is to drive more of the people who use the free, ad-supported service Spotify offers to sign up for a monthly plan.
There are several flaws in this plan. For one, only a select handful of artists will even want to window their releases — for the vast majority of them, being heard by as many people as possible is the goal. Secondly, this flies in the face of one of the biggest trend in recent music history, the surprise album drop. If an artist drop a surprise album and only makes it available to select userson select platforms, it doesn’t drive long-lasting conversion to that platform. Rather, it drives people to sign up and then cancel, or people to download the album from torrent sites. Either way, it’s not a fan-friendly move, and one that could spur backlash just as easily as it drives buzz.
Beyond that, there’s still the issue of the fundamental mismatch between how most of the population consumes content and how streaming services are priced. In an oft-cited Nielsen survey, they found that the average music fan in the US spends $150 a year on music, and about half of that goes to live music. Spotify costs $120 per year. That’s not particularly difficult math to figure out. To add to that, those albums likely to be windowed are by artists who have the greatest number of casual fans, many of whom are likely to just wait a few weeks instead of investing in a product that still doesn’t make financial sense for them. Also- Spotify has a great track record of converting free to paid, and if they can continued to be incentivized to do this- which I know their licensing deals enforce- let’s let data scientists work on converting users instead of holding them hostage for new music.
The whole strategy is a step back for the labels, who finally seem to have embraced streaming after a protracted resistance. After the dustup over exclusivity last year, where some labels took a public stand after several artists posted releases to single platforms, it seemed like the era of artificial scarcity was drawing to a close. Of course, the other side of this coin is that because streaming services have started turning profits for labels, they want to maximize those profits, and what better way to do so than by trying to get more people to pay for the services?
Alas, that just won’t work. There’s still plenty of free music out there for casual music fans; instead of paying for Spotify, they’ll just use a playlist like Pandora or listen to online or terrestrial radio. Many of the lower cost services that were supposed to launch never made it out of the gate, and with no ability to compete on price, most of the streaming services on the market feel the same.
While this has been a hot topic in recent days, the new windowing strategy likely won’t affect many artists, and might quietly disappear after a few albums and bouts of pushback from fans. It seems like an experiment, but one that is destined to fail.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.