Coldplay and Spotify: What’s an Album Worth in 2011?

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You’ve probably read recently about Coldplay’s decision to keep their new record Mylo Xyloto off insta-streaming sites like Spotify, Rdio, Rhapsody, etc. The move has led to much industry hand-wringing, and headlines like “Coldplay snub sounds alarm for streaming music.” It’s certainly an interesting choice on the part of the band and their management, and after the jump we wonder what might be behind it — and what a similar decision might mean for bands who aren’t quite the commercial juggernauts that Coldplay are.

The decision’s being billed as an artistic one, in that the band want people to hear the album as a whole, rather than streaming tracks piecemeal. This is as it may be (although it’s rather undermined by the fact that individual tracks are available on iTunes), but it’s also easy to understand from a financial standpoint: basically, Coldplay are going to sell a gazillion albums anyway, and if a million Spotify streams earned Lady Gaga all of $167, why would an artist in Coldplay’s position bother with potentially undermining album sales for such negligible revenue?

Coldplay are presumably confident that their fanbase is going buy the album on the strength of loyalty and the couple of singles they’ve heard. And that fanbase is probably large enough for the band not to care about the casual buyers who may not buy Mylo Xyloto without getting a chance to hear it first. No matter what happens, Coldplay are going to make money — their stature these days is such that they could probably choose to sell Mylo Xyloto only at selected sandwich shops on Tuesdays and still shift a shedload of copies.

The more interesting question is what a similar decision might mean for smaller artists — in other words, whether choosing to keep your music away from streaming sites might help or hinder your album sales figures. There are several factors at play here. There’s the argument that even if Spotify, etc. don’t make you a whole lot of cash, having your album available on such sites allows it to reach millions of people who would otherwise never have heard it, and that some of those people might buy your record. And, conversely, there’s the argument that having an album on such services actively discourages people from buying it, because, well, why would they? It’s streaming right there on their desktop, for free. Or as part of what they get for a $10-per-month subscription fee.

On the first point, even before the advent of Spotify, there seems to have been a shift over the past 10-15 years among consumers, an increasing reluctance to buy anything before you hear the whole thing first. In the past, it used to be that you’d hear a song on the radio, and if you liked it, you might go out and buy the single, assuming that the song in question was available in that format. Or, for a few dollars more, you might splash out and buy the album. Sure, you might be able to convince the clerk at the record shop to stick a copy on the CD player, but most likely, you were buying an album without having heard the majority of its content. And, without getting too misty-eyed for the past, that was at least part of the appeal — getting it home, unwrapping it and discovering the rest of the band’s songs, and (hopefully) liking them.

Those days are gone, of course. These days, if you like just one song, you either buy it for $1.69 from iTunes — or, as is becoming more likely with the increasing popularity of streaming sites, you just stream it. There’s certainly an argument to be made that this is good for consumers, and a triumph for the free market, and all that, in that consumers are no longer forced to buy a product they don’t necessarily want (an album) to get the product they do want (a song or two). After all, the entire concept of “the album” as it exists today is a fairly arbitrary one — it didn’t really exist before the 1950s, and it’s dictated by the historical capacity of formats that are essentially obsolete.

But in any case, not being able to hear Mylo Xyloto instantly, on demand, at the click of a mouse is an unusual thing these days, and it’s certainly not a feeling the music-buying public appears to enjoy. Do a search on Twitter for “Coldplay streaming” and you’ll find plenty of comments like “I just pirated Coldplay’s new album because it wasn’t on Spotify” or “No preview, no purchase” or “Hey Coldplay, hope you enjoy the loss of revenue from pirates.” It’s the last point that seems most egregious, the idea that people have some inalienable right to have an album right now, and if it’s not available how and when they want it, well, they’re just going to take it.

This is all indicative of how little value people place on “content” these days. If you’re like much of the public in 2011, if you do actually buy a physical album, you’re quite possibly buying it more as a physical item (a slab of vinyl with some nice artwork, perhaps) than you are investing in the music contained therein — which, after all, you could probably get for free. Which brings us onto the second point. If you can basically have all the music you could possibly want (except for Mylo Xyloto, of course) for $10 a month, how much is an album worth to you? A whole lot less than the $16.99 you used to pay, you might argue — unless, of course, that album isn’t part of your magic online jukebox, in which case its value manifests separately to that of all the music you can stream. This might make it worth more to you. It might make it worth less. But either way, it’s an interesting question that Coldplay are posing here.

Whether flat-fee services devalue music by treating it as subscription-based content is an argument that’s already been done to death, and one that isn’t going to end any time soon. Spotify responded to Coldplay’s decision with a press release proclaiming that they “have already convinced millions of consumers to pay for music again,” which may or may not be true (there’s certainly no data available on how many erstwhile pirates have changed their ways after seeing the subscription streaming light), but also rather conveniently avoids the question of what convincing millions of consumers to pay a whole lot less for music than they used to means for the industry.

There’s no clear answer to this, but we’re thinking that maybe Coldplay have decided that it’s worth losing Spotify revenue if it means that even a small proportion of people who would otherwise have streamed the album will go out and buy it. And maybe that might be something for other artists to think about too. If you’re a band or a small label, we’d be fascinated to know what you think.