It all started in 1999. In that year Napster, a music focused online service emphasizing on sharing songs through the MP3 format, was founded. Sean Parker, entrepreneur and philanthropist, met Shawn Fanning, computer programmer, entrepreneur, and angel investor, a few years prior.
With the help of investor John Fanning, Shawn’s uncle, together the duo changed the music industry forever.
For good reason, Napster was opposed by recording labels, and the Recording Industry Association of America (RIAA). Essentially, Napster made it accessible and encouraged their users to download copies, via MP3 file, of vintage, unreleased, or bootlegged concert songs, cutting into album sales.
The three are credited with helping end the Album Era, a period that emphasized consumers buying artists’ album, not singles.
Fast forward to 2017, you have iTunes, where singles along with full albums are sold.
Also, a newer trend are services such as Spotify, Tidal, and Apple Music where artists’ albums aren’t sold, but streamed.
On a per stream basis, streams aren’t lucrative, coming in anywhere around $0.006 and $0.0084.
But, where streaming comes into play is in regards to album sales. For example, Drake’s latest release More Life only sold approximately 226,000 physical copies first week, but went on to debut atop the Billboard 200 with approximately 505,000 album-equivalent units.
Album equivalents are now include streaming, song downloads, yes, song downloads in addition to pure album sales.
On its first day of release, More Life broke Ed Sheeran’s streaming record of approximately 56 million streams with about 61 million of its own.
Because of the way music is consumed in 2017, the RIAA had to change its rules. Today, 10 song downloads, or sales, equal one album purchase while 1,500 song streams equal an album purchase as well.
While fans may appreciate the cost effectiveness accessibility they have to their favorite artists’ music, it’s made it harder for those artists to make a living solely off their music, save Drake and a few other mega stars.
A healthy amount of artists’ today rely on touring, and merchandise sales as sustainable incomes.
While leaks in the music industry don’t have as big an impact as they once did, the once monumental impact it had, back in the Album Era, has contributed to the state of the industry in 2017.
And, it all started in 1999 when Napster was founded.