Here’s a long, detailed, but readable account of one long-time musician’s experience with the effect of streaming music services Pandora and Spotify on his ability to make money from his recordings. The writer saves the punchline for his final paragraphs:
As businesses, Pandora and Spotify are divorced from music. To me, it’s a short logical step to observe that they are doing nothing for the business of music– except undermining the simple cottage industry of pressing ideas onto vinyl, and selling them for more than they cost to manufacture. I am no Luddite– I am not smashing iPhones or sabotaging software. In fact, I subscribe to Spotify for $9.99 a month (the equivalent of 680,462 annual plays of "Tugboat") because I love music, and the access it gives me to music of all kinds is incredible.
But I have simply stopped looking to these business models to do anything for me financially as a musician. As for sharing our music without a business model of any kind, that’s exactly how I got into this– we called it punk rock. Which is why we are streaming all of our recordings, completely free, on the Bandcamp sites we set up for Galaxie 500 and Damon & Naomi. Enjoy. [Emphasis added]
For awhile musicians could make a couple of bucks each time someone would buy a physical recording from them—but most were only able to reach a small number of listeners in that fashion, and as a result made little money. The streaming services now extend a musician’s reach tremendously—but at such a small royalty rate that the money is inconsequential, much less than they used to make selling recordings one by one. Oh, if only we made the same amount per sale as before, but to so many more people!
Sadly, that’s not how things turned out when the technology changed. But the change still made it infinitely easier to reach listeners. Once you give up on the idea of making money off that particular transaction (as the writer has), new possibilities open up.