Sales in Germany's music market stabilized in 2011 for the first time in years. Music vendors are setting their sights on digital streams - with a site called Rdio the latest to take a stab at the German market.
Record executives have been singing the blues for over a decade, facing slumping sales and a digital landscape that changes as fast as the latest music.
But there is some good news for execs, according to a survey of 2011 music revenues released by the Federal Association for the German Music Industry. Total sales in Germany's music branch remained the same as in 2010, a contrast with the drop-off seen every year since 1997.
That's not to say that music merchants can breathe easily, however. The 2011 sales volume of around 1.5 billion euros ($2 billion) is nearly 40 percent lower compared with a decade ago.
Clouds and streams
Digital streaming services are trying to reclaim part of the revenue lost in that time by offering music from "clouds." Users need not download or buy individual songs; instead they pay a flat monthly rate to stream songs from an enormous selection stored on central servers. Rdio is the latest cloud service in Germany that lets users stream an unlimited number of songs for either 4.99 or 9.99 euros per month, with the latter price including access to music offline and on mobile devices.
Rdio faces competition in Germany from similar sites like Simfy and Zaoza. But the streaming market is still far from saturated, said Scott Bagby, Rdio’s vice president of strategic and international partnerships.
"A major label head told me recently that just seven million people worldwide have paid for subscription services. When you consider that in a global context, there's huge room for growth - this is very nascent," Bagby said in an interview with DW.
Rdio aims to roll out its website in other European countries this year with Spain and Portugal up next. Users in the US, Canada, Brazil and Australia can already access Rdio.
The end of the album?
Digital music streams are the latest in a series of ways to package music, ranging from vinyl to cassettes to mp3s. The length available with each format has had an influence on how much music artists choose to record. Vinyl LPs often top out at 50 minutes; CDs can play longer. Digital streams could allow performers to put out music as often as they want and with no time restrictions.
But so far mainstream musicians have shown few signs of abandoning the 12- to 15-song album format. That may be because buyers still go for CDs - at least in the German market, where compact discs accounted for three fourths of total music sales in 2011.
On the other hand, some less mainstream artists are turning to new formats.
"For several years now we've seen that musicians who make electronic music prefer EPs and singles. In that genre, the album format no longer seems to play a big role," said Marcus von Husen, a Simfy spokesman.
Von Husen also pointed to the media's recent love-hate affair with American singer Lana del Rey to illustrate that newcomers scarcely need an album to get heard. After a British DJ discovered the retro songstress, Lana del Rey's track "Video Games" on YouTube made her a star long before the January release of her full-length album "Born to Die," which is now perched at the top of the German charts.
Not everyone's a fan
Del Rey's success is also a testament to the power labels continue to wield in the branch - she has been criticized as being the product of record company marketing ploys - and streaming music sites depend heavily on label partnerships. Though Rdio offers a web tool that gives those without a major industry contract the chance to upload their tracks, the application has drawn little interest.
"The technology behind streaming is actually quite complex in terms of getting the files in the right format and the metadata needed for reporting. Individuals just don’t seem to have that capability - nor do some small labels," Bagby said.
Labels do not always have the final say, though. In 2011, major international acts such as Adele and Coldplay insisted that their latest releases would not be available on streaming sites. Some musicians have complained that digital streams offer profit margins so small for the artist that they are not worth using.
And fans with a keen ear may object to sites like Rdio and Simfy for a different reason. Song files available for streaming are of lower sound quality than the tracks on a CD. The difference may be undetectable for a listener using earphones hooked up to a smartphone, but it is a consideration for audiophiles with high-end speakers.
"It's certain that compromised audio files like MP3 or AAC will be with us for a while," said Marcus von Husen, adding that the bandwidth available even on the best mobile servers "does not suffice and will not suffice for several years to play [higher quality] WAV or FLAC files without distortion."
101 years of music
The community-based aspects and convenience of streaming sites will be enough for many users to ignore such objections. Rdio stresses that social components - like seeing comments, ratings and playlists by everyone from your favorite singer to the kid next door - make up the backbone of its website.
Many of the same social media features are found on Simfy or international competitors like Spotify, though the Rdio interface makes them more prominent and accessible.
And if keeping tabs on your friends' playlists isn't a convincing-enough argument, music streamers hope their huge selection will be. By adding up their over 12 million songs, Rdio's representatives point out, there are 101 years of music to choose from.