Pandora CEO Brian McAndrews recently penned an op-ed piece in which he argues that free on-demand music streaming services are destroying the music industry.
As reported by Digital Trends, McAndrews argues that free music streaming should be used as an “on-ramp” to paid subscription services. He also suggests that it’s up to content rights holders and these services to make meaningful changes to the current system by putting limits on streaming and implementing trial periods to increase conversions from free listeners to paid subscribers.
The CEO is careful to make a clear distinction between online radio services — like Pandora — which are ad-supported and programmed, offering listeners the ability to discover new music, and those on-demand streaming services which allow the user to select a song to listen to over and over again, which, he states, is the modern-day equivalent to ownership. It’s no different, says McAndrews, than allowing them to walk into a record store and take any record without charging them.
While some consumers do use free streaming services as an “on-ramp” to a subscription-based listening experience, many more are taking advantage of holes in the system to stream music on an ongoing basis for free, in what amounts to an endless “highway” of free media. This is what McAndrews calls the “gray market,” and he claims it’s driving down both our perception of and the actual value of music. If consumers can legally listen to free on-demand music permanently, he says, without converting to paying models, the value of music will continue to spiral downward to the benefit of no one.
But McAndrews says there’s hope that the trend is reversible. But in order to reverse it, he argues that the industry must admit that consumers are not at fault — they are are simply seeking out the lowest price for their media. The lion’s share of responsibility, according to McAndrews, falls on the on-demand streaming services and their agreements with content rights holders, which have created this “leak” in the system. It’s up to these providers, the Pandora CEO attests, to make genuine attempts to get consumers to pay for music and lead them into a subscription model.
McAndrews concludes by saying that the ecosystem between ad-supported radio models and the eventual path to subscription-based services can and should work together to banish the gray market experiment of recorded music.