Social media has drastically changed the way artists and labels communicate with their fanbase, but is social media truly helping, or is it our frenemy?
Wired.com author, Eliot Van Buskirk, recently discussed the gaining popularity of free music-streaming sites and how they pose a serious threat to the music industry’s primary revenue generating outlet, iTunes.
Downloading music is still a big business, and it pays a lot of bills: Artists and labels have already earned around $4 billion from iTunes sales alone. But the dynamic is shifting to the cloud, where tracks are always available and listeners generally don’t have to fork out money.
…But will there be enough money to go around – especially for the labels, which control the music everyone wants to listen to and talk about on these networks? Not even frontrunner Google can keep up with the licensing payments labels have demanded, in some cases.
Forrester concludes that once labels and sites acknowledge that for some users, free is all they’re ever going to get, social media sites will generate significant revenue from ads and subscriptions – just not enough to return it to those high-flying days of the late ’90s, when everyone bought CDs to replace their cassettes and vinyl.
Also, make sure to check out his other article YouTube Can’t Save the Music Business (Yet?)