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Back in the noughties, the British record industry talked a lot about "fifty quid blokes" - professional middle-aged men who would leave work on Friday, go into

Back in the noughties, the British record industry talked a lot about "fifty quid blokes" - professional middle-aged men who would leave work on Friday, go into HMV or Borders and buy a couple of CDs, a DVD and a book, totalling about £50. They were very well known in retail and were catered to with music magazines like Q, Mojo and The Word. They were hugely important to the record industry (hence all the classic rock reissues at that time), but their spending has mostly dried up thanks to streaming. £20 a month for Spotify and Netflix is a bargain compared to what they were spending on physical media. I think it's fairly clear from the revenue numbers that the move to streaming has been a net loss for the recording industry. If they are to sustain the growth in paid streaming and return to 1990s levels of revenue, they need to either substantially grow the overall market for paid streaming or substantially increase subscription fees. The big problem they face is segmentation - there's no practical way of charging a hardcore music fan $40/mo and a casual listener $10/mo for the same unlimited service.

KozmoNau7 8y ago
I don't think we're ever going to return to a revenue level similar to the 90s, honestly I think that was a historical aberration caused by a number of supporting factors. In the early 90s, more people in the west had more disposable income, production had become all-digital (lowering production costs), and CDs cost next to nothing to make compared to stamping vinyl or making cassettes, so the profit margins were bigger. There was also the explosion of pop music, especially boy bands with gigantic fan bases. CD players were inexpensive and started to come as standard equipment in cars. At the same time, storage capacity and processing power in the average PC was inadequate for storing uncompressed CD quality audio and playing back compressed audio, respectively. Of course, usable lossy audio codecs were very much in their infancy, and CD-R drives were still very expensive, slow and unreliable. Not to mention the lacking state of mobile devices at the time, if anyone even had a mobile phone at this time, it was very likely to be on an old-fashioned analog network. It was the perfect environment for big record industry profits, but by the late 90s/early 2000s, we had Napster, affordable CD-R drives, increased storage space, processing power and internet speeds, and of course properly viable lossy codecs. Pandora's box was opened, and now matter how they try, the big labels can't close it back up again. I don't think segmentation is the solution, you can't get people to accept tiered pricing based on usage, the $10 for unlimited usage like a library is the entire reason people love streaming services. I think what they can do is add higher subscription tiers with bonus features, higher sound quality, personalized content that isn't just made by an algorithm. Maybe they could even do exclusive access to new releases, but that may result in backlash from "basic" subscribers who feel like they're getting cheated out of content. In the end, perhaps it's just an uncomfortable shift towards less income from records sales/plays, and a bigger reliance on touring and merch sales. I know a few bands that use Patreon as a sort of "pay what you want" fanclubs, where you get early access to various content at lower tiers, and things like Skype chats or guitar lessons at higher tiers.

KozmoNau7 8y ago

I don't think we're ever going to return to a revenue level similar to the 90s, honestly I think that was a historical aberration caused by a number of supporting factors. In the early 90s, more people in the west had more disposable income, production had become all-digital (lowering production costs), and CDs cost next to nothing to make compared to stamping vinyl or making cassettes, so the profit margins were bigger. There was also the explosion of pop music, especially boy bands with gigantic fan bases. CD players were inexpensive and started to come as standard equipment in cars. At the same time, storage capacity and processing power in the average PC was inadequate for storing uncompressed CD quality audio and playing back compressed audio, respectively. Of course, usable lossy audio codecs were very much in their infancy, and CD-R drives were still very expensive, slow and unreliable. Not to mention the lacking state of mobile devices at the time, if anyone even had a mobile phone at this time, it was very likely to be on an old-fashioned analog network. It was the perfect environment for big record industry profits, but by the late 90s/early 2000s, we had Napster, affordable CD-R drives, increased storage space, processing power and internet speeds, and of course properly viable lossy codecs. Pandora's box was opened, and now matter how they try, the big labels can't close it back up again. I don't think segmentation is the solution, you can't get people to accept tiered pricing based on usage, the $10 for unlimited usage like a library is the entire reason people love streaming services. I think what they can do is add higher subscription tiers with bonus features, higher sound quality, personalized content that isn't just made by an algorithm. Maybe they could even do exclusive access to new releases, but that may result in backlash from "basic" subscribers who feel like they're getting cheated out of content. In the end, perhaps it's just an uncomfortable shift towards less income from records sales/plays, and a bigger reliance on touring and merch sales. I know a few bands that use Patreon as a sort of "pay what you want" fanclubs, where you get early access to various content at lower tiers, and things like Skype chats or guitar lessons at higher tiers.