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Fairness and Attractiveness of Contract

between Artists and Music Streaming Platforms

 

STUDENT PAPER

By Cassandra Picasse

SKEMA Business School

Paris, France

 



ABSTRACT

The music industry is undergoing profound changes thanks to the emergence of digital music services and music streaming. Companies such as Spotify and Apple Music have been accused of failing to compensate artists fairly and more and more artists consider the royalties model as inaccurate. In this paper, we compare the different models of Spotify, Apple Music, and Tidal to know which one is fairer with artists, or rather, which one is the least unfair with artists, using the Multi-Attribute Decision making. We analyzed each platform with the non-dimensional scaling technique and compensatory method to ultimately, select the preferred alternative and we finally discovered that Tidal is the more appropriate service from the artists’ perspective. Finally, we assumed that online music streaming platforms could find numerous ways to be fairer with artists and to develop a model which could allow taking into account their own needs and expectations and that of each other party, for instance by using the block-chain technology or questioning the monthly subscription model.

Key words: Payment, Pricing, Music, Streaming, Service, Artist, Quality, Fairness, Trial period

INTRODUCTION

After suffering losses in revenue due to the decline of physical recordings such as CD-ROM’s and tapes and to piracy on the Internet during the nineties, the music industry is getting better. In 2016, the music sales in the United States represented $7.7 billion revenue and achieved the industry’s highest sales figure since 2009. These figures resulted of the activities of online music streaming platforms such as Apple Music, Spotify, Tidal, and others. In 2016, it represented 51% of the business in the Unites-States.

Online music streaming platforms propose either to benefit from a free access but by accepting to receive advertisements or by agreeing to pay a subscription for a Premium service (ad-free) and thus to have unlimited access to music, across different devices including smartphones, tablets, and televisions. Subscriptions are offered at varying rates, one for students (around $5), for a single user (around $10) and family (around 15$). Today, the industry tries to wring as much money as possible from digital music services.

Problem Statement

Despite the apparent new revenue stream that it offers from the Internet to music industry and the apparent higher efficiency to fight online piracy, the music streaming platforms have been accused of depreciating the value of music in the eyes of listeners through their free tier and accused of failing to compensate artists fairly. Indeed, more and more artists and right-holders consider that the royalties model is not entirely fair and accurate. However, the companies still aren’t making any profit, despite their flourishing revenues, because most of them are plowed into royalties’ payment. For instance, in 2016, despite its increasing revenues, Spotify revealed a net loss of $194 million. In order to face this criticism, how the economic model of music streaming platforms should be adapted to be fairer with artists?

Considering the evolution of the music industry and the growing presence of these digital music services, it’s critical to find a model that could meet the expectations of the three interested parties; the music streaming platforms, the customers, and the artists. Should the music streaming platforms keep proposing a free ad-based offering to access to music? Should the music streaming platforms increase their fees? Should the music streaming platforms be more transparent regarding the percentage they plowed back to labels and music publishers?

This paper has been designed to research, analyze and answer the following questions:

  • Which music streaming platforms between Spotify, Apple Music, and Tidal is the more attractive and fairer with artists?
  • How could music streaming platforms be fairer with artists?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: 
Picasse, S. (2018). Fairness and Attractiveness of Contract between Artists and Music Streaming Platforms, PM World Journal, Volume VII, Issue 5, May 2018. https://pmworldjournal.net/wp-content/uploads/2018/05/pmwj70-May2018-Picasse-contract-between-artists-and-music-streaming-platforms-student-paper.pdf



About the Author


Cassandra Picasse

Paris, France





Cassandra Picasse
is a Master of Science student in SKEMA Business School, pursuing the specialization « Project and Program Management and Business Development » (PPMBD). She integrated the « Programme Grande École » of SKEMA Business School in 2015 after graduating from the University Institute of Technology of Troyes. Last year, she studied for six months at Fundação Dom Cabral in Belo Horizonte in Brazil. She has worked for Atos, a European IT services corporation during four months as PMO Assistant. Cassandra can be contacted at [email protected] or www.linkedin.com/in/cpicasse