Back in 1998, Jay-Z released his most commercially successful album yet – Vol. 2… Hard Knock Life. It sold 5.4 million copies, each retailing at roughly 17 dollars each. In 2018, Jay-Z and Beyonce released ‘EVERYTHING IS LOVE’ under the moniker, The Carters. Physically only 70,000 copies were sold, with the rest of their revenue coming from streaming. Compared to how much they used to make, this was a pittance. Yet, Jay-Z and Beyonce remain extremely influential, with an approximate combined net worth of $1.9 billion. How so? We’ll have to go back to the early 2000s to find out.
Napster was founded in 1999 by Shawn Fanning and Sean Parker. Envisioned as a peer-to-peer file sharing service, it simplified the process of being able to access music. No more waiting in line for the latest Slipknot single only to find it sold out. Most importantly, why bother paying when what you seek is right in front of you? Soon, with over 80 million active users, the service posed a genuine threat to the music industry. Sued over the Digital Millennium Copyright Act by artists like Metallica, it shut down in 2003.
What that did, however, was spawn a host of similar applications. From Limewire to Pirate Bay, every form of media was available to consume as internet speeds increased. Revenue streams collapsed as the industry struggled to cope with the sudden paradigm shift of piracy. Identifying availability to be the main issue, Apple set about counteracting it by bringing music closer to us. Introducing iTunes and the iPod in 2001, Apple made the whole process of accessing music legally easier, and (slightly more) economically feasible, charging 9.99$ per album. Coupled with a revolutionary User Interface (for the time) and strong marketing, the solution to Piracy seemed to be here.
No, not really.
Sure, Apple remedied the problem of accessibility. They stylized legality. But having noticed how music could be acquired for free, why would anyone bother paying for music again? Sure, the pirated songs barely ever had album art or metadata, and the quality was abysmal with shockingly low bitrates. But why bother paying? Did the quality matter when your headphones were priced the same as a Subway sandwich? It was way too little, way too late. Several streaming platforms (Spotify, Deezer, Bandcamp) followed but to very little avail.
But where piracy has helped, is promoting music to audiences. Ask yourself, which was the first song you heard, and where did you hear it. It wasn’t on a platform where you pay to stream a song. You discovered it on a random website, full of pop-ups and dodgy links. While streaming revenue is at an all-time high ($5.9 billion in the first half of 2021), most of the money goes to the company itself, with the artist receiving very little money. Where the artist does make most of their income, however, is touring and merchandise. The money made by an artist these days solely off their music wouldn’t be enough to record their music, let alone live off it. This is the reason why touring has become a lot more frequent, with festivals playing a vital role in generating revenue.
Lesser income off streaming has also resulted in artists diversifying their projects, based on commercial interest or otherwise. From Kanye’s iconic Yeezy’s, Dr Dre’s Beats, Jay-Z’s Tidal, and Frank Ocean’s Homer, long gone are the days where you could sit on the heaps of cash you made off your music alone. Whether these projects are a result of their vision or a commercial venture is a different discussion, but could you imagine Keith Richards selling t-shirts? These side ventures have also resulted in a greater cultural footprint. Their music isn’t the only thing iconic now.
The music industry isn’t the same anymore. Albums are now more front-heavy to adapt to streaming algorithms. Lots of indie artists have day jobs. As the world adapts to the internet every day, so does the industry. Piracy gave music the push it needed to truly go digital and to revolutionize. The only question is, where do we go from here? Higher revenue through a different subscription model? Higher quality music with lower file sizes? Only time will tell.
Written by Pratham
Image credits: wipr
Chords & Co. 