Why Streaming Hasn’t Caught On

We’re over thinking it.

The concept of streaming is astounding. Mind blowing. All the world’s music at your fingertips for the price of one lunch a month?

So why hasn’t it caught onto the mainstream?

People say it won’t work. That Rhapsody has been trying it for a decade. That people clearly must not want it.

Well that’s what they said about tablets. Until the iPad came out.

They say streaming isn’t sustainable. Rdio is nearly bankrupt. They say Spotify is next. And then Beats.

iTunes (and Amazon) has its streaming service ready to go. They will flip the switch when the time is just right. They don’t want to lose out on revenue. And the time is not right yet. Sure download sales are declining. More rapidly every month. But we’re not there.

No one with half a brain denies that streaming is the next dominant audio format.

Downloading music will not exist in 10 years.

Well maybe FLAC files for audiophiles. It will be niche. Like vinyl today.

But why hasn’t it caught on yet?

Mobile Data Speed

The first reason is mobile data inconsistencies. It’s not just speed. I live in Los Angeles. The 2nd largest city in the country.  And with Verizon, I’m rarely on LTE OR 3G near my place. Usually I have that 1x icon with one bar.

A half a block from Sunset Strip!

I can’t play Spotify from my phone on my block. Or load YouTube videos. Forget downloading anything.

I know it’s because of the Hollywood Hills, but still.

Until mobile data and connection speeds are flawless and FAST people won’t adopt it.

As of last year, according to TechCrunch, only 16% will try a failing app more than twice.

And unless the stars align for your mobile connection, it’s very likely your streaming service won’t work flawlessly when you try it out for the first or second time.

People put up with YouTube because it’s free. Even though the sound quality is horrendous, search is frustrating, curation is nonexistent and it relies on shoddy connection speeds and buffering.

The Headache

The 2nd, and more important, reason streaming hasn’t caught on is because it’s a hassle.

Average Joes and Janes have no patience for music services. Hell, I barely do. How much effort does it take to sync songs from my iTunes to my iPhone? Way too much!

Most people who have an Android don’t even know that you can put music on it. Even those with iPhones KNOW they can, they just choose not to because of the mental effort it will take to go through all the steps.

Forget iCloud transferring. You have to pay for the amount of storage you need to actually hold music.

Convincing average, non-techie, non-musician, non-music lovers to download an app that may or may not work perfectly depending on your data connection and then PAY monthly to ACCESS the music on it? Forget about it.

Beats is onto something, though.

Add it to the cell phone bill. Don’t ask. Just do.

Apple got it right separating the iTunes app from the Music app. To play music on an iPhone you touch the Music button. Intuitive.

Droid has a Music app button as well. Getting music to it is another story. Most people have thousands of songs in their iTunes. How do you transfer that to the Music app on a Droid? Yeah, I’ve watched the YouTube videos too to figure it out.

There needs to be 1 button on the phone that streams all the world’s music.

Effortless. Touch it and go.

No headache. No credit card.

You say that’s YouTube. But it’s video based. Sound quality is horrible. Albums are impossible. There’s no radio.

YouTube Music is coming. Rumored for this Summer. But it was rumored for last Fall too. We’ll see if it can takeover. I doubt it.

Spotify should be striking deals with Verizon, T-Mobile and Sprint. Or Beats will beat them to it. Or YouTube Music.

Or, and most likely, Apple.

While Spotify, Beats, Rdio, Amazon, YouTube Music and the rest are battling it out, Apple will soon flip the switch.

That little Music button on the iPhone won’t just be the songs you downloaded from iTunes. It will be all the world’s music. $9.99 will be added to each phone’s bill – or maybe $14.99 for a family plan. But it will be seamless.

Then Google Play in the Music button will follow for Droids.

AT&T will abandon Beats when Apple and Google get to them.

Spotify, Beats, Rdio, Rhapsody, Slacker? Well, this will kill them.

Unless they strike the deals first.

And who will get to the auto industry first? That could save Spotify or Beats. YouTube Music could get there first, but that would surprise me.

The reason Satellite radio is so successful is because it came with the car and people just kept paying for it because they liked it. They didn’t have to decide to download it. Or install it. It was there. They tried it. They liked it. And they just kept it.

Once you can click a button and verbally ask your car to play this song or that playlist or that station without having to plug your phone in? And that data is synced to your phone, tablet, laptop and in-home stereo system. Game over.

Musicians won’t have to worry about low payout rates. Once every Droid, iPhone and car has a built-in music streaming service that people are automatically signed up for, added to the bill, the checks will flow. And they’ll be better than download sales.

If you give people an effortless alternative, with no decision making, no downloading, no installing, no buffering, no hassle, they’ll shrug off the extra line to the cell phone bill.

Photo by Audreyjm529 from Flickr used with the Creative Commons License.

51 Responses

  1. i love mike love

    streaming already has caught on: youtube gets 1 billion uniques a month.

    • Paul Resnikoff

      Indeed, you can argue that streaming is totally mainstream, and largely happening on YouTube first, Pandora second, then Spotify, then everyone else.

      Well, one thing hasn’t caught on: paying for it.

      • Anonymous

        You can easily make 1 billion consumers pay $20/month.

        Give them one service that delivers everything: News, social media, music, TV series and movies.

        • TuneHunter

          XM Radio after 15 years at $12/mth. servicing the cream of the cream of the society got 25 million subs.

          Streaming activity serving to 13 – 35 crowd with big effort has a chance for 300 million subs by 2025.
          Those will be $5 subs ( counting $2 rate in Kazakhstan) x12 x 300 will make just 18 billion,
          1999 CD sales with no growth in account are worth today 56 billion and in 2025 probably 75B.


      • Paul Resnikoff

        Actually, I forgot to mention Sirius XM, which is the largest paid subscription service in music (and one of the largest in entertainment overall). But, on its own, definitely not mainstream. Ocassionally I bump into a subscriber, despite the relatively high percentage vs. population in the US and Canada.

      • Anonymous

        If only the majors hadn’t taken several years to license Spotify, thus teaching users to solely use Youtube, which has had a free app on their smart phone for as long as smart phones have existed.

        • TuneHunter

          No to long ago boys at Universal have played with matches and have started own house fire.

          Now they are scared and confused especially that the have finished streaming negotiations with Apple and Amazon right before IFPI 9% decline for 2013. Unknowingly they have added more gasoline to the fire.

          We hope that smart boys at Google, Amazon or Apple will not be happy with ashes left over after music as a merchandise is finished. Subscriptions and ads will bring only 25 to 35 billion by 2025.

          Time to start logical and simple discovery moment monetization – happiness for all & 100B industry by 2020!

  2. Minneapolis Musician

    I mark the Spotify tracks I want to listen to locally on my Galaxy S3, and I download them while connected to my wireless router at home.

    They then play from my device when I am out and about in a “dead spot”. Works great.

    But if your cell phone is your only internet connection and it is slow where you live, that *would* be a problem.


    • TuneHunter

      Take advantage of your premium total ownership. Pump it up and come back in 12 months for one month.
      It will average your premium subscription at 90 cents a month.

      • DRMHunter

        It doesn’t work that way. After a month your downloads cannot be played offline DRM

        • TuneHunter

          Wow, I am impressed.
          Still they can do all tune discovery at free Spotify and rip the goods from YouTube.

  3. J

    Font is way too small on this site for an iphone. Just sayin.

  4. Courtney McDowell

    The other problem with streaming service is per-use data charges on mobile networks. Until those are eliminated, which seems to be happening slowly but surely, streaming music services will not take off. I mean, I am a self-declared audiophile, but I will not pay $10-15 a month for a service that I *might* be able to use when I’m out and about, and not connected to my home WiFi. Especially when I have about 15k songs on Google Play Music I can create instant mixes from.

    • Minneapolis Musician


      With Spotify, I just mark a playlist as “local”, and it is sent to my phone (I do this at home when I automatically am connected by fast WiFi). Then that playlist is available without streaming when I am away from home.


  5. Casey

    Striking deals with cell carriers isn’t easy. But even so, what Beats did with At&t isn’t really all that revolutionary. It is the family plan that is a game changer. Simply adding the cost to your cell bill is something Rhapsody and Slacker have done on and off for years. Rhapsody was actually built into some MetroPCS plans. But no one has anything close to a $15 for 5 people family plan. It is cheaper than having just 2 people on the Rdio family plan and significantly cheaper than having 5 Spotify Premium accounts. No doubt the family plan requires special licensing from the major labels and isn’t something just anyone could implement overnight. However there still isn’t much evidence that Beats will be successful.

  6. A-J Charron

    Apart from really low sound quality (and more and more people are having an issue with this), the major problem with streaming is the same as with most music services and the main reason why music isn’t selling as much (supposedly): there is no discovery.

    With radio, you’re forced to listen to things whether you want to or not. That’s the only way to really discover new music. Just asking an app to suggest is no good, you get several suggestions and it’s hit or miss. It has to be enforced on you. That’s why radio is still the major medium for music discovery.

    And if streaming is the future (I have more than half a brain, that’s why it’s so obvious there’s no future in it), and music doesn’t sell anymore, certainly not CDs, why is it that my local CD manufacturer’s waiting list in now 1 month vs 2 weeks a year and a half ago? I did check, they did not layoff anyone and they have more machines processing them now then back then. If CDs don’t sell, then who’s making them?

    • Anon

      Spotify, WIMP and Deezer all deliver impeccable audio quality. Youtube is full of old rubbish video rips and therefore often substandard. So I will just assume you are talking about Youtube and not the others.

  7. Albert Shanker

    This could be the dumbest article ever written. The 70 plus year recording business model,good or bad ,injured by downloads first ,and buried by streaming. It’s like everything’s public domain now. Music creation is about as useful as …..for a career. Music is a grand hobby now.

  8. Clinton

    I stream for free everyday. It works best on 4G (lte) but it’s ok on 3g. the app I use is Slacker radio, it has Settings to use less Data at the cost of sound quality and is somewhat Customizable on the free version. Also, if you pay, you can repeat songs and no ads.

  9. Hoodgrown

    Beats is actually the first music service I’ve ever paid for. I like it… but even it’s lowest settings… it uses way more data than say a Pandora.

      • Anonymous

        “Why pay at all?”

        Because nobody can afford to write and produce new songs for you, if you don’t pay.

        It’s extremely expensive to make music in the quality consumers want.

  10. derby

    Mainstream or not, but I love streaming. I am sitting here at my computer with Spotify up and running, and I couldn’t be happier. I just read about a new band on a music blog – going to dial them up right now on Spotify. Then I’ll click on my playlist of classic rock tracks. I see no issues here. It’s all good – regardless of what service. Enjoy the music!

    • Anonymous

      “I see no issues here”

      That’s because you don’t know how music is made — i.e. streaming can’t finance music production in the quality consumers want.

      • Casey

        Free on-demand streaming might be an issue. But paid on-demand streaming costs nearly twice what the average person pays for music annually. If people would actually pay, streaming should have little difficulty financing music production. Although like music downloads, it shouldn’t be considered the only source of revenue.

        • Anonymous

          “If people would actually pay, streaming should have little difficulty financing music production”

          Correct — but they won’t. That’s not an opinion, that’s a documented fact.

          And, like I said elsewhere, there’s only one way to change that: Start a service that delivers everything: High quality news, social media, music, TV series and movies.

          Most people will pay $20/month for that.

      • derby

        The focus of the article was about streaming catching on. I’m just saying it has caught on with me. It’s not a perfect system, but speaking as a consumer of music, I think it’s terrific. What’s not to like? Now an artist might feel differently.

        • Anonymous

          “What’s not to like?”

          That there won’t be anybody around to make music for your children.

          Lyricists, composers, arrangers, vocalists, musicians, recording- mixing- and mastering engineers have to be paid. If you don’t pay them, they won’t work. If they won’t work, there’ll be no more music.

          I couldn’t care less about what artists feel, streaming is not a threat to me personally. But streaming is a threat to music.

          • GGG

            You DO realize the sale of recorded music has been a fairly small timeframe in human existence, right? Music will always be made. Not everyone is like you; a shallow, musical opportunist making emotionless songs nobody will care about in 10 years so you can call yourself a “musician.” Worst case scenario all the hacks, wannabes and hobbyists who think they can cut it as professional musicians will know their place again, and be too scared to try and make it. The flood waters will recede and what we’ll be left with is the people who have music in their veins. Who can’t do anything else, and who give us that real emotional connection we all love so much about the best music.

          • Anonymous

            “Music will always be made.”

            Here’s what we have learned in the West since the 9th Century:

            The world’s best music — ‘best’ defined as most popular and unforgettable — is created in environments that support its creators.

            The more support, the better music.

  11. Minneapolis Musician

    If the masses wanted better, more interesting music and lyrics, then the streaming low-pay model would indeed be in trouble. Excellent music takes time and effort to create, and musicians have to earn a living.

    But the masses are fine with computer-assisted drag and drop creations that can be created relatively easily all day long.

    There are more than enough people happy to churn out the “good enough” stuff on their laptop for the mass pop market, for free, or for a little tiny bit of notice now and then, I think.

  12. Brandon G

    “The reason Satellite radio is so successful …..” Stopped reading there

  13. Veteran - US MUSIC INDUSTRY 1970-today

    I do nothing BUT stream. In my car. In my home/office. At the gym. On my smartphone. I know I’m in the minority here — and I know that MOST MOST MOST MOST MOST people get their music for FREE on the radio. I also know we’ve been getting our music for free since radio came into being.

  14. David Rosen

    streaming is the only way i listen to music now. even my own music that i compose, i stream through google play music.

    • TuneHunter

      Me and almost everyone will agree with you, but we have to introduce monetization!
      Subs and ads will not do!
      They have been around music for 80 years – always as a bonus money.

      We need desperately primary income source from music.

  15. oz

    streaming music and streaming/ondemand services like netflix are fundamentally different, both in terms of the media and consumer expectations (and the attendant differing psychologies involved). there is also a perception of value, like it or not – folks have no problem paying $10-15 monthly for netflix or whatever service, because they watch x number of hours of quality shows per month. 3 minute pop songs just don’t cut it in any respect, the perception of quality isn’t there, neither is there sufficient quantity of quality curated material. streaming any media naturally suits longer broadcasts anyway – film, tele, podcasts, radio shows etc. it’s more to do with the nature of media than the actual services themselves. why bother cueing up single tunes when you cue up hours of online viewing?

    also, the universal one button fix to hear everything is nice in theory, but rests on a lot of assumptions, some of which may never be realised.

    • Anonymous

      “folks have no problem paying $10-15 monthly for netflix”

      Yes, they do — Netflix has less than 40M subscribers.

      But add high quality music, news and communication, and you can make a billion consumers pay $20/month.

      Streaming will continue to lose money until one global service offers everything. Could be Apple or the Big Three.

      • Paul Resnikoff

        “less than 40M”?

        I’d be happy with that number!

  16. guest

    Revenue for artists has been the biggest casualty of this format. Not because of it’s viability, but because the CEO’s of companies like Spotify refuse to compensate artists in respectful manner. Without a “hard product retail infrastructure” at the street level (as compact discs used to be), all genres have a lower value to society at large.

  17. hippydog

    I dont disagree with the general idea of Ari’s article..
    but 😉
    since I am one of those annoying internet people that feels the need to comment on everything, i must say…

    1.) concept of streaming:
    it really isnt that mind blowing..
    The concept of a central server with “kiosks” has been around before the internet.. It was heavily predicted that the “server-slave” computer idea would be how everyone would connect..
    What happened instead is computers became a lot more powerful a lot faster then people thought.. Who needs a server or mainframe when you can purchase a personal computer just as as powerful if you just wait a few years..

    having said that.. yes.. decades later “THE CLOUD” is finally starting to be mainstream.. Something ‘tech companies’ have been trying to push on people for many years now..

    except the ‘buy in’ of the public has been pretty slow..
    because the same amount of tech companies have been telling people not to trust the internet.. (virus’s, hackers, phishing, etc etc)

    What has been successful has been

    partial cloud storage…

    like dropbox and google drive, etc etc..

    Where everything is synced with online storage, but access is always available, as its also stored locally..

    quote “No one with half a brain denies that streaming is the next dominant audio format.”
    i must have half a brain 😉
    cause I’m denying it..
    Actually I dont know whats going to happen..
    from past experience, that things having a habit of changing when someone invents something better, or something else just becomes “cooler, or hip”..
    Is streaming going to be around for awhile? sure! Will it be a dominate format? it might.. more likely by the time it gets to that point, things will zig instead of zag again..
    I sure as heck wouldnt put all my eggs in that basket..

    Quote “Downloading music will not exist in 10 years.”

    Memory storage just keeps increasing.. I think the more likely scenario is “Caching”

    Streaming (as Ari mentioned) still has multiple inherent issues.. the primary one for it to work is a person needs to be connected 100% of the time..
    If you “cache” or sync the medium for those times you dont have a connection
    THATS A DOWNLOAD.. sure.. its in a proprietary format and can be deleted without your control, but it is still a DOWNLOAD..

    Download… Streaming… Caching….
    it doesnt really matter..

    What is changing is how music is owned..
    Its the “you paid for it, now you own it” that is changing..
    we are moving to a “rental” state..
    the “as long as you keep paying, you can use it” type of use

    Quote “The reason Satellite radio is so successful”
    sorry, the reason Satellite survived (it was within inches of failing at one point)
    is there was no other alternative (if you wanted access to tons of content at a fair price)
    and there was no other competition (carrying around a large hard drive and constantly curating and organizing your media was the only other option.. IE: headache)

  18. Paul Resnikoff

    I’m not sure I agree with the mobile connection point, at least as it relates to adoption. For starters, mobile connections in the US are often inferior to mobile connections in other countries. And I’m not just talking about places like South Korea. Colombia – yes, Colombia – for example, has better connections than right here in LA, at least in the major cities. Go figure.

    Secondly, people will often complain about their connections, but don’t abandon their services if there isn’t a good connection. This is especially true with younger people, who will tolerate glitchy Facetime and Skype calls and just say ‘oh well’ and do something else. Over time, many of these problems will be resolved.

    And please don’t forget cacheing! I listen to cache’d stuff when I’m out. I stream Pandora even. And I’m not unhappy or screaming about how crappy it is.

  19. Half A Brain

    Please forgive me as I only have half a brain. But if audio files become obsolete in the next ten years, then what will be the source for streaming? Where will all those searches connect as they move through a music provider’s servers in order to “stream” something? Putting aside the public’s future supply and demand marketing models, aren’t streams basically a playback of an “audio file” on a larger scale? If digital files become obsolete (technologically), won’t streaming become obsolete as well?

    So here is my “half-brained” prediction for the future: In ten years I’m predicting we will have 5-10 Terabytes of memory on our mobile devices and the internet and cellular pipes will be so fast that “compression” is what will become obsolete. Hopefully we’ll all be listening to the music the way it was intended to be heard: “Uncompressed.”

    Personally, I love streaming. But I love my download collection more. It’s just more convenient for me and I can definitely hear the difference depending on the song. I can understand how some people will use streaming exclusively and that’s fine. To each their own.

    For some of us “audiophiles” streaming is a great discovery tool and a way to sample a song before we download it (assuming we actually like the song). But it’s not a replacement for everyone and I think that these services will all live side by side in the future.

  20. Anonymous

    Some major points for streaming to work:

    1. ALL players need to be on board. This includes all artists, all labels, etc.
    2. Need to clean up metadata, current apps are a mess.
    3. Curation
    4. Agreed, add it to the cell phone bill – we pay $12-$15 for albums why not pay $12/month for ALL music.

  21. James

    Sounds like someone who got can’t figure out Beats.

  22. andrew bernier

    I made this argument in college 5 years ago. Little late buddy. And I wasn’t the first to it. Completely agree and this I what I’ve been preaching for years.

  23. Henry Chatfield

    On a lighter note, Ari, I like what you did here with that picture…

  24. Patrick

    “Spotify should be striking deals with Verizon, T-Mobile and Sprint. Or Beats will beat them to it. Or YouTube Music.”
    This is a terrible idea. They need to be lobbying for net neutrality and for government regulation over internet speeds. Sound concept for guaranteed fast steaming without ruining the internet.