Debate rages as Spotify, MOG, and Rdio kill / save the music industry
For the conscience-laden music consumer, streaming music services present an interesting quandary. By separating the concept of “legal access to music” from the age-old paradigm of “paying the artist for an entire song or album …
Context & Ripple Effects
The kill-or-save question is the latest round in a fight that has run for years: internet radio companies warned back in 2007 that a per-song performance fee could ruin them, and Spotify's 2009 face-off with last.fm framed the same tension between free listening and paying rights holders. By November 2011 the argument had sharpened into blame — Rdio and MOG publicly pushed back against charges that their payouts shortchange artists, while industry watchers hailed subscription streaming as the first real alternative to the 99-cent download.
First-order effects
- Consumers choosing between access and ownership now face a genuine fork: Rdio has been building toward this moment all year, launching a Mac desktop app in March, beating Spotify and MOG to an iPad app in August, and opening a free ad-free full-song tier to new US users in October — each move converting listeners before the conscience debate settles.
Second-order effects
- The 99-cent iTunes download model is the direct competitor under pressure: if subscription access becomes the moral and economic default, Apple's per-unit pricing loses its position as the only 'legitimate' way to consume music, and labels gain a second licensing front to negotiate.
Third-order effects
- If access displaces ownership, artist income shifts from per-unit sales to per-stream royalties whose viability depends entirely on subscriber scale — meaning the services' survival math, not consumer ethics, will decide whether streaming saves or starves the industry.
The trend: Recorded music is migrating from per-unit purchases to subscription access, with the outcome hinging on whether streaming services can reach the subscriber scale their royalty models require.