Music streaming services – a new era of music distribution?

After long judicial proceedings, one of the biggest music streaming services in Europe – Spotify – launched in Germany in March 2012. In the field of music streaming it has to compete with a lot of services with different offers and prices. In general you can say that every service is operating with two different kinds of accounts: a free one where you have to deal with advertising and a premium account without advertising and sometimes additional features.

The still processing shift of the music market from CD stores to the internet is closely connected to the development of the internet. During the late 90s the spread of internet connections and bandwidths increased significantly. Upcoming peer-to-peer networks and other downloading or filesharing platforms allowed the access to millions of data, especially music and videos. The early networks like Kazaa or Napster were indeed illegal and without any backup from the music industry. This resulted in various legal disputes between the music labels and the owners and users of these platforms. The big music labels were not willing to take the losses they had to bear because of people just sharing their music data with everyone else. Some of them still haven´t recovered from the developments of these years.

In 2001, Apple revolutionized the market with its iTunes store. The simple design and handling and also the price of usually one dollar per song made it a big success. Also the industry could recover slightly because the trend shifted again towards getting music legally by buying from a licensed partner of them.

But the trend of decreasing sells of CDs and other sound carriers is still vital. New developments in filesharing software and methods are followed by endless legal disputes over copyrights and distribution rights and so on.

During the last decade a lot of companies came up with new ideas of distributing music. The first attempts were often internet radios where the user can start an own channel with music that´s related to the one he likes to listen to. But then more and more services with an own database of music came up on the market. The first one with an access to a music library via monthly payments was Rhapsody, founded 2001 in the USA. Within the States it´s still the leading service. The biggest one in Europe is Spotify, founded in 2008.

The advantage of these services is very easy to identify: with a monthly payment, comparable to the price of a CD, the user has access to a huge database of different kind of music. The most services operating on the market offer a library containing 7 to 13 million songs. It means the user has no longer to buy a CD to have everyday access to his favourite music (a functioning internet connection given). And also the music industry is satisfied to a certain point, because the provider has to pay them license fees, no matter if a free user is listen to it or a premium one.

Frank Taubert of Myjuke says sooner or later everyone will be using streaming services to listen to music.

So the new technique sounds like the paradise where both music labels and people that want to enjoy music for free.

Well it´s obviously not that easy, as several legal disputes between Spotify and the GEMA in Germany  before their market launch show. Long time it wasn´t clear how high the license fees have to be and of there have to be different fees for business or mobile users.

And there are also some issues concerning the safety of customer data, because for Spotify for example you have to register via a Facebook account and also some of the other services are connected with social networks.

Concerning the existing issues there are some problems that have to be solved but especially the free accounts are a useful extension of everyone´s home collection of music.

But still there will be a coexisting together with the traditional way of purchasing, consuming and collecting music.