The FCC just murdered net neutrality. And that’s probably bad news most of us in the music industry.
If you’re Apple, Amazon, or Google, this doesn’t really affect you. In fact, the dismantling of net neutrality will probably help platforms like Apple Music, Amazon Music Unlimited, Google Play Music, and even YouTube.
And the reason is pretty simple. Those companies have billions in their war chests to pay for ‘fast lanes’ and ‘prioritization’ from ISPs. And the US Government just handed them a way to use that money to outpace their competition.
Everyone else — including those heavily reliant on outside investment — should be extremely nervous right now.
Advocates for the dismantling of net neutrality say this makes the internet better and more robust. But those ‘advocates’ are usually the ISPs themselves, or legislators receiving hefty donations from those ISPs (and here’s a fun list of exactly how much those legislators received from access providers).
Broadband access providers are not in business to make less money. They want to make more money — billions more money — and they’re not shedding a tear if your business suffers because of it.
Or, if your highly-leveraged streaming platform doesn’t quite deliver the Wall Street multiple you wanted because of elevated access charges.
That’s right: the smart analysts on Wall Street are taking a fresh look at promising web-based platforms like Spotify. Because you can now add ‘broadband prioritization fees’ to the list of recurring overhead charges.
Spotify just lowered their notoriously onerous royalty obligations to the major label conglomerates. That was a big, big win that took years to achieve. But now, they may have to hand some of those gains back to a different group of elephants: Comcast, Charter Communications, Cox, and numerous other US-based ISPs.
Other struggling streaming companies, particularly Pandora, TIDAL, and Rhapsody, could be saddled with unmanageable fast lane charges. And who knows what this means for other platforms like Bandcamp and Patreon, not to mention your self-hosted site.
Of course, Comcast doesn’t want to put any of those companies out of business — after all, a dead company can’t pay for fast lane access. Better to kill them over time, and maximize the long-term return.
As for Apple Music, Amazon Music Unlimited, and the Google music properties, bring it on!
These companies will demand ‘most favored nations’ payment terms with other streaming providers. Because as long as rivals like Spotify aren’t getting a discount, the entrenched corporations win. The war of attrition favors the richest companies, not the best ones.
But fast lanes don’t really matter, right?
Study after study shows that speed absolutely matters when it comes to customer retention, conversion, and overall experience.
But this is not just ‘fast vs. slow’. Amazon has found that milliseconds of latency can change a customer’s decision process. Abandonment rates clearly increase with every millisecond of delay — and any serious site owner or platform operator understands that.
So, let’s ask ourselves: how would a de-prioritized class of streaming services fare? What if Spotify, TIDAL, and Rhapsody are suddenly slower?
Spotify is notorious for analyzing every detail of its music streaming and cacheing delivery process. That’s right: obsessive tech-geeks have made Spotify a better service by ironing out every delivery issue. Their CEO is from uTorrent, after all. And they’ve been in this space for nearly ten years (yeah, tech experience matters).
So what happens to all that meticulous work when Apple can just buy faster access?
I have no idea. And I don’t think Spotify does, either. But this definitely doesn’t help anyone that isn’t a mega-billionaire corporation. In fact, every ‘smaller’ app, site, platform, or service that isn’t a billion-dollar behemoth should be extremely concerned about the repercussions ahead.
Meanwhile, don’t expect surging consumer demand for streaming music and other online music experiences to diminish. But the number of companies that can effectively meet that demand could decrease.
And you can thank the FCC for that.