Streaming services are becoming consumers' music delivery platform of choice

What happens next to music could shape the internet for decades to come, writes Jamie Carter

PUBLISHED : Friday, 25 July, 2014, 1:49am
UPDATED : Friday, 25 July, 2014, 1:49am

Ever since the invention of the MP3 file in 1993, the music industry has been in flux. From illegal file-sharing to YouTube, from downloads to streaming services, it continues to pioneer new ways to consume content, and new business models. What happens next to music could shape the internet for decades to come.

In Hong Kong, the tide towards streaming music appears unstoppable, with the likes of Soliton, KKBox, Moov and especially Spotify gradually supplanting digital downloads as the dominant way that we listen to music.

It's the latter that's sealing this trend worldwide, too, with 10 million subscribers and 40 million active users across 56 countries listening to Spotify's 30 million tracks. Its popularity hasn't gone unnoticed.

iTunes is already looking very old hat, and even Spotify is relatively raw

"There's a huge shift in consumer behaviour going on from individual track or playlist downloads to streaming services," says Jeremy Silver, author of Digital Medieval: The First Twenty Years of Music on the Web … and the Next Twenty Years.

Perhaps the biggest hint that Spotify-style, subscription-based online music streaming is destined to become the default way for all of us to consume music is Apple's acquisition of Beats.

Although known mostly for its recognisable Beats by Dr Dre headphones, it's the company's fledgling Beats Music streaming service that Apple wanted, presumably to help lend a complete refresh of its iTunes service.

"Music is quickly evolving; iTunes is relatively new and is already looking very old hat, and even Spotify is relatively raw," says Silver. "There's a lot of work to be done to get them to be mainstream products."

That work is about to be done by Apple, which will undoubtedly concentrate on integrating streamed music into its iOS interface on iPhones and iPads.

"It's interesting that Apple bought Beats and didn't try to buy Spotify," says Silver. Apple isn't the only one with a new focus on music streaming. In recent months Amazon has launched Prime Music, while Google has a new Play Music All Access service. Google also owns YouTube, which still provides millions of music fans with tracks that are otherwise hard to find.

Will consumers be happy with streaming as the major delivery mechanism?

"My guess is that we won't see downloading disappear nor will we see physical sales disappear completely either," says Silver. "We're seeing the decline of the old ways, but the new ways are still a rapidly evolving state where nothing is settled."

It's perhaps this constant state of flux in music delivery that has put a brake on the popularity of multi-room music. Once music became digital, the ability to carry it around with us - whether on iPods or smartphones - proved impossible to resist, but the concept of spraying digital music to home hi-fis and different rooms has been a slow-burner.

There are now speaker systems from Sonos and Bose that use Wi-fi and Apple Airplay to receive tunes sent from phone apps, but all come with their own speakers. There are surprisingly few ways to upgrade existing equipment, but they're about to hit.

Fon's Gramofon "modern cloud jukebox" is a simple Wi-fi router; it links to a hi-fi and seeks to aggregate Spotify and other streaming services via a smartphone app. It's out later this year, as is Beep, a metallic dial that creates Wi-fi-based multi-room for a hi-fi system.

Already out is Rocki: Play, a gadget that allows multiple smartphone users to send streamed songs from anywhere to any speaker.

Like most multi-room systems, it's modular, but at a mere HK$380 it's far cheaper than competitors.

"We realised that music streaming stops with the phone," says Dennis List, co-founder and vice-president of Singapore and Netherlands-based Rocki. "So we came up with a way of upgrading all of your current speakers to Wi-fi." The Rocki app is now available on both iOS and Android.

"The apps currently play local music on a phone as well as from NAS drives and other sources on a network, but we're integrating Spotify, Deezer and a long list of streaming services - including radio stations. You can also sync a track to multiple Rocki units to create instant multi-room audio."

This new trend for flexibility complements one for higher quality. After years of listening to compressed audio, now higher bit-rate, better-than-CD-quality tunes are being pushed by everyone from Sony and Onkyo to Android phones (which now support hi-res FLAC files) and soon - rumour has it - Apple devices. But does anyone want it?

"Just because there is some confusion around what HD audio currently means and offers to consumers, the industry must not stop innovating to provide better products, content and user experiences," says Gunnar Larsen, vice-president of products at 7digital, which is partnering with Onkyo to create a hi-res audio download service.

He believes that the increasing demand for high-quality headphones and connected speakers and stereos offers proof that music fans are increasingly after a more immersive experience.

Silver agrees: "We want more immersive, more realistic, more beautiful experiences and that demand is going to grow, so the hardware that delivers that and the software that makes it easy to navigate will grow, " he says.

Ever greater bandwidth is the enabler for music to follow the example of HD gaming and the coming era of 4k movie downloads and streaming. But there are some issues to work out before we can all listen in crystal-clear quality.

"There is still a lot of analogue thinking and doing in creating the core product of digital music services - the music itself," says Larsen. "When you look across the digital music industry, there are many areas where there has been little true innovation beyond the means of distribution and discovery.

"Where's the innovation in the arts, lyrics, in-song unlocking and metadata, just to mention a few?"

However, Larsen is bullish about the future. "Quality will always prevail," he says.

So will big business. The creeping consolidation of music streaming services is in keeping with how the internet at large is developing. It's what Silver calls a "digital medieval" landscape. "The medieval times were characterised by a great deal of change, anarchy and an abandonment of the ways of the past, a lack of clarity about the future, and a lot of innovation," he says.

"That's what it's like today. We're in a landscape that's dominated by a few major players - Google, Apple, Facebook and Amazon - which are almost digital city states that want to convince us that the more we inhabit their world entirely the easier a place the world is to live."

Silver thinks that this medieval situation - which started with music and is coming full circle with the new focus on streaming - is now the default business model for all of these companies for entertainment and, soon, health and home security.

"When our personal medical records belong to companies like these we'll have entered a different era," he says. So is this the Internet of Things? "It's the Internet of People, actually," says Silver. "It's the quantified self."

The music industry - which has lost more than half of its value since 1999 when the net really took hold - is still in a state of flux, but its innovations continue to inform what the net does next.