Spotify began November 2018 with an announcement that they reached 87 million subscribers. News outlets from the Wall Street Journal to The Verge, and Variety to The Hollywood Reporter covered this news as a competition with Apple Music, and the overall shifting of the music industry. However, little was said about the real impact on music consumption as social activity or the excess profits this generates for everyone in the recording industry.
In “Digital Subscriptions: The Unending Consumption of Music in the Digital Era,” Center for Theory’s Director, Dr. David Arditi, explores the way the recording industry changed our consumption habits and increased profits exponentially. What we can’t lose is that the average consumer used to buy about $40 worth of recorded music per year, but with subscriptions, they are paying $120 per year. Think about $870,000,000/month in music consumption on Spotify alone (another $530,000,000 on Apple Music). In the essay, Arditi analyze this further.
Here is the abstract:
When Apple purchased Beats Music in 2014, it signified a major moment in the transformation of the recorded music commodity. This is the second time in the digital era that Apple has catalyzed a transformation of the recorded commodity after first disrupting the recording industry by creating the iTunes store. Now, the recording industry is changing from a business model dependent on the sale of commodities to a model based on subscriptions and streaming. I call this model unending consumption because it traps music listeners in a cycle where they must continually subscribe to have access to music. By giving subscribers unlimited access to music in exchange for $10 per month, the recording industry aims to increase the amount that the average consumer spends per year on music by 200%.
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