Music on the internet has undergone a huge change in approach in the last decade or so: we are well and truly in the streaming era of music distribution. How did we get here?

The first website of this nature was well ahead of its time - launched in January 1993, IUMA (Internet Underground Music Archive) sounds a lot like what websites like SoundCloud and Bandcamp do today: it provided unsigned artists a platform to share music and communicate with fans while avoiding the big record labels. While the idea was perfectly fine - innovative, in fact - it was simply too early in the internet’s lifespan to be a hit, where upload speeds were abysmal and not everyone knew what an internet browser was yet. More on the IUMA here.

One early site that is still going strong is Last.fm: founded in 2002, it originally was an Internet radio station that used the user’s listening habits to generate dynamic playlists. The free streaming aspect was removed in 2009, and it became a website solely dedicated to tracking the user’s listening habits. The technology that constructed an idea of the user’s music taste laid the foundation for many such algorithms to come.

Pandora was also a similarly influential website: it had a similar concept of generating a personalized radio station per user, but introduced a ‘freemium’ model, which would be mimicked endlessly. In short, the user could listen for free with ads interrupting the music, or pay $10 a month for no interruptions.

You could also see the legacy of programs like Napster in websites such as Grooveshark; a site which allowed users to upload any music and listen to any uploads by fellow users free of charge. It was shut down in 2015 after being sued multiple times.

The rise of streaming can be attributed to the many conveniences it offers. Similar to the way people ditched their physical collections to go file-based, now they didn't even need the space to store the file themselves. This especially was a factor in the early 2010s, when phone storage tended to be very low (base model iPhones of this time period could have as little as 8gb). Streaming was a great way to have access to a huge library of music without necessitating a local copy on your device.

In response to growing demands by record companies over how much control they exerted over artists, Radiohead - after leaving EMI in the same year - released their seventh album, In Rainbows, using a pay-what-you-want model as an experiment.

The method of purchase was their website, with options to either pre-order the download or the discbox (which also contained a digitial download). Downloads were made available on October 10, 2007, and retailers got physical copies of the album on January 1, 2008.

Despite the band providing a legal, safe way to download the album for free on their website, some articles have claimed that the album was illegally downloaded up to 10 times more than releases from other top artists.

And yet, it didn’t seem to matter. The album entered multiple charts at the No. 1 spot, and made more money than their previous album (Hail to the Thief) even before it physically released.

Spotify was launched in 2006 and has quickly become the undisputed leader in music streaming, having a staggering 433 million monthly active users and 188 million paying subscribers to their premium model.

Spotify’s freemium model operates upon a few rules:

• If you don’t have a premium subscription, you can only shuffle play on mobile
• Free users are limited to an audio bitrate of 128kbps AAC
• Without a premium subscription, an ad will play every few songs

Instead of operating upon a set price for each song or album, Spotify pays the artist based on a fixed price per ‘stream’. How much, exactly? On average, between $0.003-$0.005 per stream. Spotify has not been free of controversy: in 2020, CEO Daniel Ek told artists to simply adapt to the new landscape of music, and that “you can’t record music once every three to four years and think that’s going to be enough.” Naturally, taking such advice from an executive whose riches were built off of profiting from your work did not go over well with some artists. Source
Spotify does not hold off on paying rights holders, though - around 70% of generated revenue goes toward the labels, while the artists themselves make between 5-25% - more details on this here.
Spotify has also branched heavily into the podcast space, spending sums up to $100 million on exclusive deals with podcasters such as Joe Rogan - a move criticized by those wanting fairer payments for music artists.

The fact is that while labels and publishers profit greatly from the streaming model, artists without a huge backlog will struggle to generate revenue remotely close to equivalent CD sales.

Spotify has no shortage of competitors in the streaming space: while their biggest direct competitor is Apple Music, YouTube has had a long tradition of users uploading full albums and songs to its platform. In terms of online music distribution in the more classic iTunes Store sense, there has never been a better time to buy from the artist.

Sites like Bandcamp have the option for a Pay-What-You-Want pricing model, up to the artist to decide. Furthermore, it places an emphasis on audio quality and forces the artist to first upload their music in a lossless format, which the site then converts into several others. The user then gets to choose what format best suits their needs, but sound quality is never paywalled further past the barrier of entry. It also provides extras like direct links to physical media versions and merchandising.

SoundCloud is another hugely popular option, particularly for hip-hop artists (birthing the somewhat derogatory ‘SoundCloud Rapper’ label). The platform’s biggest issue is the complete lack of monetization, but despite this it remains a very solid option for amateurs and artists just starting out and wanting somewhere to be heard.

The power of the provider is not to be forgotten when dealing with a streaming service: similar to Netflix removing shows at random, issues with rights holders can cause albums and songs to disappear right off the platform with nothing the user can do to stop it. The idea that streaming and freedom of distribution also equals a good outcome for the artist is also a misguided one, looking at the royalty rates and the cut of the revenue that the artist actually takes.

Spotify in particular is a platform of compromises - on audio quality (even premium members max out at a lossy AAC file), on the experience of an album (there is no way to upload more packaging and art beyond the front cover), on the very tracklisting with forced shuffle play, which has driven artists to a more single-focused, playlist-compatible writing approach, with the album being a secondary thought.

The pure convenience of the streaming and digital music age may outweigh the things that we lost in the transition across: people are caring less and less about things that used to have detail and thought pored into them, like the design and packaging of a physical copy, sound quality, and the idea of listening to an album all the way through.

This new era of music has come at a time of unprecedented access to all things - thanks largely in part to the increased power of the average computer and the internet. The age of the YouTube tutorial is beautiful in that the limits of what you can learn are only set by your own perseverance - this is particularly true for music, where if you have a working computer and an internet connection, you can easily download a Digital Audio Workstation and learn composition, production, even how to play an instrument.

I think that it is important to look back upon these past formats for things we might take into the future; but I also think it is equally as important to push new ideas of how we interact with music. More interactivity than ever is possible with the music: involving the listener and making them a part of the music making experience is something vital that not many have experimented with. An example of this from recent memory would be Kanye West’s recent Donda Stem Player, which allowed the user to remix any of the tracks from the album or user-imported songs using AI to isolate separate tracks. Experiments such as the virtual concert could also be new frontiers to further explore for the way music is distributed.

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