While I have never and will never defend the RIAA (they should be disbanded), it is clear that the streaming economy is not sustainable (in its current form) and that we've become accustom to racing to the bottom for every market we disrupt. I think this headline is a bit overstating the problem considering that the streaming economy, instead of passing on cost increases to customers, is instead cutting prices in an attempt to grow as fast as possible, leaving a large wake of destruction (sure a few are raising their prices a bit, but it obviously isn't enough).
This is a hyper competitive strategy we've seen in tech for how many years now? Would you defend Google and Amazon for dropping data storage prices and offering almost free services in order to further disrupt those markets and then force the smaller startups caught in the squeeze out of business?
We've done this again and again as consumers and users deciding that the only thing worth paying for is worth paying as little as possible.
If I am a cheese maker and my milk costs go up, do I a) eat the cost increase and in some cases cut my prices to entice more cheese consumption or do I b) pass this milk increase cost on to my customers? Now how does the music-tech industry handle this? Well in many cases, by cutting the monthly price for music or finding someone else to subsidize that cost to keep the prices artificially low (ad markets, VC money, or carriers). All the while the tech industry invests nothing into artist development, marketing of artists, promotion, production, recording.
The world cannot simply be funded only by Kickstarter campaigns, t-shirt sales, and advertising.
So I guess I'd ask Cory...why do you never talk about those issues? There are millions of jobs that go well beyond the RIAA or record labels that are affected by the revenue declines in the music industry. I'm not defending the music industry or how the royalty systems are set up, but Pandora is no angel here either and neither is the tech industry.
"despite the fact that companies like Pandora already give virtually all the money they take in to the labels"
Cory, these streaming companies are for profit...not charity. They were funded by VCs and in many cases went public or are looking towards it...and many of their founders have gotten wealthy off the work of other people..those people are not just artists, but producers, songwriters, sound engineers, instrument makers, etc. Sure, Pandora and others pay a lot in royalties...it is the cost of doing business and the business they are in.
Before the advent of "freemium," every company I've ever worked for or was a founder of...we had costs. In one of my companies, the tech I built and sold had a certain margin and market forces being what they were, if my costs went up, I had to pass those costs...I didn't cut my prices or complain that my costs were too high...I simply adjusted.
I've been a proponent of streaming as a tech for over 10 years...and I am a member of more than one service that I pay for...but I seriously doubt the sustainability of streaming and the market we're creating by wanting everything for almost no cost...and I feel this way about more than music. We've somehow made this decision that ad markets are how we are going to sustain all the businesses of the Internet and that's a very dangerous position to be in. There's only so much ad money to go around and eventually someone is going to have to actually pay for something.