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In Reply to: RE: It's a matter of $$$ with QOBUZ... posted by email@example.com on February 28, 2017 at 04:09:38
" Can you suggest what may replace streaming services? "
My concrn is specifically with hi-rez streaming services not with the overall concept.
Basically 70% of hi-rez streaming services' income is paid out to rights owners as royalties. As hi-rez services are priced at a premium rate compared to lossy streaming services the market interest for hi-rez seems limited as for most listeners cheaper alternatives are available (search online to see the number of subscribers Spotify has compared to Tidal). Thus the residual income is not enough to adequately support the service.
Even where subscriber numbers are high, such as with Spotify, they are still insufficient for them to turn a profit or even to break even.
If income from subscriptions is insufficient, then other revenue streams must be available to the ervice. Downloads will not suffice as the streams are directly substiutional. So that leaves streaming services who can offer a music service as only a part of their total commercial strategy. Step forward; Apple, Google and Amazon. They have the financial muscle to run the services and are probably in a position to get better royalty deals than the small fry.
Of course the difficulty for audiophiles is that none of the big streaming serices appear to be in the slightest bit interested in non-lossy delivery platforms.
So, in brief, hi-rez streaming services will ultimately give way to lossy services from a limited number of suppliers, none of whom will have their music services as their sole or main business interest.
By "hi-res" I presume you mean CD quality - 16/44.1 and not proper high resolution of 24/192.
Yes, it has always surprised and disappointed me that Amazon never offered CD quality downloads. However, even their 99p per "track" or typically £8 per CD in MP3 format is costly and CD quality would be even more with genuine hi-res (24/192) costlier still.
With streaming though, it shouldn't cost the providers much more to offer 16/44.1 compared with MP3. They need a bigger hard drive, but that's about it. The artists would (should) receive the same royalty whether their music is listened to in MP3, 16/44.1 or 24-192, so any extra revenue should be good for the provider.
The providers that offer higher quality should over time educate those non-mobile listeners to appreciate the better quality and get more to migrate to better quality streaming. They should perhaps reduce the difference in price between the 2 formats. Paying double for higher quality seems extortion to me! A 25% hike in subscription may pay them big dividends as far as number of premium subscribers is concerned.
For sure the market will change, but surely streaming is here to stay and hopefully one should in future be able to pick one's preferred quality with little difference in cost. Whether the likes of Tidal will survive if the big boys enter the market is yet to be seen, but I suspect if Amazon takes a serious interest, it'll be curtains for many streaming service.
Yes , hi-rez really can just mean lossless in streaming terminology, but CD quality up to 24/192 is what I am addressing.
The difficulty with pricing is that the streaming services and download providers don't have carte blanche. There almost certainly will be different levels of royalty payable for different qualities of the delivery. Not only do I expect that these differentials may be in place for the rcord companies' payments but also for the music publishers and artists (if the artists' payments are separate to those payable to the record company, which I don't expect).
That brings me to another economic difficulty that streaming services may face. The music publishers have a right to charge for every copy of their work made . This is called the mechanical right. It may be that each copy held by a streaming service results in a royalty payment for the exploitation of this right. However the vast majority of tracks that they have are never accessed by users and thus produce no income. I once saw a figure that indicated that for a service with, say, 30 million available tracks only a few thousand or tens of thousand are ever requested for play. So the streaming service may well simply just have to bear the cost of, say, 29 million of those tracks with little financial return beyond the fact that their mere existence attracts subscribers.
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