Music Just Isn't Worth What It Used to Be

How much is music worth? If you ask the artists who work, slave, cry, and sometimes even bleed to produce it, it's priceless. If you ask consumers—especially younger consumers—the answer will range somewhere between "I don't know" and "nothing, it should just be free." Between those two groups are companies like Apple, Google, Spotify, Pandora, and other technology companies that distribute that music and make the devices we listen to it on.

Same as it ever was...

Those forces have been at natural odds since the rise of recorded music. The brouhaha over Apple Music's free trial period, indie music complaints about not getting paid for that trial period, Taylor Swift's public shaming of Apple over those terms, and Apple's eventual mea culpa and policy reversal...these things are just the most recent battle in this long running war.

But as interesting as Apple's about-face on this issue was to follow, it pulled at a much bigger scab in the music industry, exposing a wound that has been festering for years. The problem is that the perceived value of recorded music has plummeted in the last 10-15 years; some artists are claiming their work is worth more than they are earning, but this conflicts with consumer reality.

Don't get me wrong. I value recorded music. I don't pirate. I buy CDs so I can have lossless rips, and if I buy online, I buy lossless or I don't buy at all. But I'm an oddball, a total nutter about these things. I value music, and I put my money where my mouth is, but I am clearly out of step with the mainstream.

Golden Years

Let's go back to the golden age of Napster, say in the year 2000. Napster was novel, and the allure of "free" access to everybody and their brother's music library was strong. Sure, it was stealing, but Napster users didn't care, and they justified their behavior by pointing at the labels. The music industry jacked up CD prices throughout the 1990s, even while recording and distribution costs declined.

Those same labels eventually sued Napster out of existence, but the genie was out of the bottle. The idea that music could be readily obtained on a large scale for free had entered the consumer consciousness, and the collapse of the perceived value of that music had begun. The record labels might have won the battle against Napster, but they lost the war and didn't even know it.

Apple, too, has played a role in devaluing music. In 2003, Steve Jobs dragged the music industry into digital distribution with the iTunes Store. At the time, the big argument was whether consumers should be allowed to buy individual songs (which they wanted), or should be forced to buy whole albums (which the labels and some artists wanted). Apple won that argument, and the perceived value of music took collateral damage.

In more recent years, consumers have flocked to ad-supported and paid subscription services that allow them access for a few bucks a month, or free. On the one hand, this established a floor for the value of music. That's a good thing in my mind because it costs money to record music. On the other, it was the biggest blow of all to the perceived value of music because consumers were suddenly being told that music was so unimportant, they don't even need to own it.

This is a hard reality of today's market. CD sales have plummeted, and even digital downloads are declining. Consumers have shown with their pocketbooks that they're willing to pay a little bit of money on a monthly basis as long as they can have everything ever recorded everywhere they want it whenever they want it.

This isn't going to change any time soon. There's too much competition for entertainment time. We can game, read, watch videos, and connect with everyone on the planet every waking moment of every day. Flat rate music streaming is only going to get bigger, and as it does, people will value it less and less.

Next: You Talk Too Much and Changes

Page 2 - You Talk Too Much


It's within this environment that comments from Billy Corgan of Smashing Pumpkins caught my eye:

We're not being paid commensurate to our value to Apple, Spotify or to anybody. Once the artists wake up, there's going to be a bloody turf war, and this is a very big sign of what I've been predicting.

This just isn't right. Take Spotify. That company doesn't make a profit. Pandora's own pursuit of profits is as legendary as both company's paltry payments to artists. Apple has never made any money from streaming, and there's no guarantee that Apple Music will change this.

Billy Corgan

Billy Corgan
Source: Wikimedia

In fact, no one is making money from streaming, and that's because consumers pay very little for it, and they are clearly unwilling to pay more. So where is the value to "Apple, Spotify, or anybody?"

Nikki Sixx of Mötley Crüe also commented this week, saying that because Apple has so much money, because it makes so much money, the company should pay recording artists fairly. On the face of it, that's undeniable. Apple should pay artists fairly, but it's that fair value that's the hard part. If consumers won't pay for music, why should Apple, Spotify, or anybody?


The music industry is changing, as my friend and business partner Dave Hamilton opined on Monday's Daily Observations. Change is often hard, and for musicians who became wealthy, if not rich, at a time when the rules were different, finding someone like Apple to blame for today's harder times is natural.

But it's misplaced. Apple isn't the cause of the declining fortunes of the music industry, and the music industry played only a small role in Apple's fortunes. The "app" was the killer app for the iPhone. The Internet in your pocket was the killer app for the iPhone. Music was in no way the killer app for the iPhone.

The inescapable fact is that music is worth precisely what people will pay for it, and they aren't paying for it like they used to. This is more likely to accelerate than it is to reverse course. The artists who will thrive in that environment will be the mega stars and those most willing to find new ways of monetizing their art.