Will music streaming providers phase out record labels in the near future?

Abstract

Music industry has always seen growing profits, from its birth until the 90s of the past century. However, with the advent of the World Wide Web and the Internet, the situation began to change, and the entire music industry experienced a long period of decline, which led to a contraction in profits of some 40%. This trend, in any case, has experienced an end in the recent past, coinciding with rising profits in the last two years. The reasons for this inversion trend can be identified in the birth and gradual diffusion of the so-called "streaming services", the real new form of music consumption. These services, in fact, allow users to benefit from an almost unlimited catalog of songs, on-demand, remotely and in any place, thanks to the support of devices such as smartphones, tablets or computers. The aforementioned services are the natural result of the so-called "digitization", a phenomenon that has permeated our society, radically changing trends, habits, customs and habits of people. As already mentioned, it is necessary to recognize how this phenomenon has also changed music industry, changing its face, dynamics and fruition, and leading to the emergence of new entities that now stand as new points of reference of this era. The streaming services collect today an increasing number of paying subscribers, and have triggered a market growth now absent for a decade, giving rise to monetary benefits for all players involved in the industry, artists and labels included. However, it is interesting to note how these new realities, among which Spotify, Deezer, Apple Music or Tidal stand out, can also represent an enemy for labels, having the resources and the ability to turn into real competitors. This is the case of Frank Ocean who leaves Def Jam to launch his new album directly on Apple Music, or the case of Kanye West with Tidal, or of Spotify with its (and ever more numerous) Spotify Sessions. We are therefore witnessing the blurring of the border between distribution and production: no longer simple distributors of third-party content but real content creators? The purpose of this thesis is therefore to evaluate the impact of these new players on the industry, in order to establish more clearly if the usual "pre-digital gatekeepers" should rejoice for the extra profits that have begun to gain or should instead begin to seriously worry about these players, who are able to sin and to start penetrating the "content creation" market.