Digital Music Takes Over, But the Best Is Yet to Come

By Tom Davenport on at

Digital music in the UK is finally making more money than its physical counterparts, thanks to income on streaming services doubling at the start of 2012. It's a huge milestone -- but can it last, and will today's streaming apps support the demands of music fans tomorrow?

It's really no wonder that the UK now has an official streaming chart. For the first time ever, digital music accounts for more than half of UK music revenues at 55.5 per cent, with the majority of digital growth from new streaming services. The US scaled past a similar checkpoint last year, and figures from Spotify's home country of Sweden paint a similar picture. Andreas Ahlenius, head of digital sales at Universal Music in Sweden, says the growth in revenue so far from streaming is "dramatic", and by 2015 the country expects revenues to equal those of its record year in 2001.

With figures like that, you might think subscription services like Spotify or Rdio are the format we'll settle with for the long term. It's a great deal for music fans, but there might be a few problems.

 

Buying Music

Physical music sales are down by 15 per cent. It's nice to think that streaming covered the deficit, but as any subscriber will tell you, hardly anyone bothers buying music when they've committed to a monthly subscription. Would Adele have outsold Pink Floyd's Dark Side Of The Moon if her album were available for streaming? Coldplay simultaneously topped every iTunes chart in the world last year, but would it have achieved the same if the band didn't hold off on streaming until its regular sales tailed off?

Last year a UK distributor, STHoldings, pulled more than 238 of its labels off streaming platforms, claiming they were damaging regular sales. Its owner Andrew Parkinson recognises the promotional opportunities with streaming services, but wants to turn those casual listeners into supportive fans who will buy merchandise and music direct from the artist and label. In fact, he revealed today that his company is working with certain streaming companies to solve this for both parties. He couldn't specify what, but apparently it'll steer fans deeper into the artist experience and let them buy direct from the artist. Perfect.

Streaming has a bright side. The market is growing, and that means more music fans are turning away from piracy in favour of newer platforms. But in turn, the likes of Spotify need to grow and adapt to the growing spectrum of needs those fans have.

Giving the listener a search box isn't always enough. Sometimes we just want to hear new music without picking it out, or want the opportunity to listen live with friends. That's where Spotify's recent AppFinder comes into play; select parties can develop an app to run inside Spotify and draw from its epic catalogue of millions of songs. This is the kind of hook that Spotify will keep its users grounded, because these apps will start to integrate into our daily listening routines. Bundle that with all those carefully crafted playlists and social features, and Spotify could have us suckered.

If we can rent access to an infinite music library, what does it mean for a la carte services like iTunes, the big daddy of digital music so far? Spotify founder Daniel Ek insists his service is about banishing piracy rather than competing with iTunes, but it's hard to envision a world where streaming grows and people still purchase audio in a separate application.

In February we looked at one way that Apple might add value to its catalogue, and that's with HD audio. Whether you buy the argument that posher audio formats sound better or not, selling high-definition music "as the artist intended" is a marketing narrative that could still compel many fans into paying a premium. If Apple can finish up with adaptive streaming to iOS devices, then boom -- the streaming platforms could look like a budget alternative that can't keep up.

 

The Future

It might seem like there are only two paths for the future of music; renting access to online catalogues or buying your own tracks to store in the cloud. But the future of music isn't set in stone, because right now, these services assume you know what you want to listen to. They don't always know your music taste, what to recommend, or the specific circumstances that you're in when you hit play.

That's where Project Now comes in. It's a forthcoming iOS app from RJDJ, the folks who made ambient audio a creative endeavour, and it could be the template for all music consumption in the future.

Picture this: you're out and about and pick up your phone to play some music. The problem is, you don't know what to listen to, or you're too busy to browse -- something we can all relate to. What if your music app knew where you were, what you were doing, how noisy your environment was, how active you were, and what the time was? Guess what: your iPhone already has enough sensors to figure all this out. All you need to do is hit play, and let the app figure out the rest.

This is the tip of the iceberg for Project Now. Music today is about picking and then experiencing the music, but it's fairly rudimentary in its current implementation. From our testing, Project Now is a little ahead of its time, because the battery life and processing speeds on my iPhone 4 can't quite handle it. It's also tied to just your iTunes library. But these are just hurdles that technology could leap over.

Let's picture a world where Project Now can access any streaming service, maybe by picking up on the work led by Tomahawk, the killer open-source music app that enables cross-platform music streaming. You hit play, and at any one time, you're presented with the most appropriate music conceivable, from any platform, be it mainstream releases on Spotify or your cousin's band on Soundcloud. Maybe it'll play tracks from local artists when you visit a new town, or specific locations are tagged with their own soundtrack for you to enjoy as you explore.

And then, imagine a platform that is hardware independent. It just plays from the best speaker source possible, whether it's your car or your favourite speakers back in your living room. Will clubs need to hire DJs in the future, or will a system curate a suitable playlist based on the tastes of the people attending?

Music might seem infinitely accessible now that digital is taking over, but it's not free from the constraints of location, hardware or fidelity just yet. The good news is that it will be -- and perhaps much sooner than you think.

[The Official Streaming Chart, Gizmodo UK (12), GizmodoAll Things DIFPI]

Image credit: Music from Shutterstock

Tom Davenport is a freelance tech and music journalist from Wiltshire, and occasionally dabbles as a recording engineer too. Read his blog here, and follow him on Twitter here.