Free music streaming is fast taking over and it continues to grow in popularity among music fans, but at the Mobile World Congress debate, which was held in Barcelona in early March, Lohan Presencer from the Ministry of Sound spoke out against streaming services such as Spotify and Deezer.
During the debate, Prescencer made clear his concerns over the freemium model and stated he could not see how it was going to be sustainable. Prescencer also went on to say he did not believe the free model used by many sites would help to combat piracy.
Instead, Prescencer expressed concerns over how damaging the freemium models might be to the music industry. He stated:
“I think what you do is you take casual consumers of music and you turn them from purchasers into noshers, into browsers, into snackers. They don’t have to engage in the subscription model. The reality of some of the bigger streaming services is that 75% of their user base are free, which has a horrific impact on the music industry and its ability to invest in talent going forward.”
Prescencer also had plenty to say about the music services being obliged to the investors in their businesses rather than the artists. He said:
“Your objective is to grow your user base, to tell a story such that you can IPO or you can sell, and you can exit, and you can put money back in the pockets of your investors. You are not the ones who are investing in developing talent. You are not the ones who are signing artists”.
Prescencer isn’t the only person in the music industry expressing concerns over the sustainability of the free music streaming model. Lucian Grainage of Universal Records, recently told the Code Media Conference that he felt ad-funded, free music services were not sustainable in the long term.
Music industry bosses have also voiced concerns over the amount of money from music streaming services that gets passed on to the artists. Marty Bandier, CEO for Sony/ATV stated that he didn’t feel enough of it was trickling down to the songwriters.