The surge of the iPod and iTunes made it more challenging for labels to pack long-playing albums with substandard "filler" records. It also made it much easier for music supporters to fall for a smash hit single for the low cost of 99 cents, debatably increasing the propensity of artists to thrill a fan for only long enough for them to hit "buy.".
Non-interactive streams are much more akin to what you come across on traditional radio. That is, you can not select a specific song, you can not rewind a song while it's playing, and there are limitations to the number of times you will hear a specific song. The best illustration of a non-interactive streaming service is Pandora. With respect to the rights related here, there are, as above, the public performance royalties that must be paid by the streaming services to the PROs who represent the copyright holders. Furthermore, there is a digital performance royalty in the sound recording that must be paid by the non-interactive streaming service to the copyright holder of the master in order for the streaming service to not infringe upon the copyright holder's exclusive right to digitally transfer her work.
For over four years now, we've been somewhat bewildered by the disgust from some musicians and labels towards streaming services like Spotify. Pandora is in the leaders of a transformation in which ever more consumers are streaming music over the internet to their smartphones or computers, instead of possessing selections of tunes. For the first time since Apple popularized the paid download in 2003, the record business is changing key again. From wax cylinders via vinyl, cassettes and CDs to MP3s, it is undergoing another layout shift-- maybe, some in the business muse, its last.
As you can see, running an interactive streaming site, such as Spotify, is a far more pricey suggestion than running a non-interactive site; such as Pandora. Someone desiring to set up a business that allows for interactive streaming must make deals with the master holders (i.e. the labels), and pay much higher royalties to the songwriters (publishers) than does someone who streams in a non-interactive fashion. The non-interactive streaming services must pay as well, but they're able to enjoy compulsory license rules that obviate the need to make deals with master holders (i.e. labels), and pay a lower fee to the songwriters (publishers).
Streaming services give music-lovers access to millions of songs, but the services are not all alike. Online-radio versions, including Pandora and Apple's iTunes Radio, choose what consumers hear, and the organizations make their revenues through advertising. Others, such as Spotify and Deezer, let customers select songs from a catalogue of 20m-30m, charging premium subscribers a regular monthly fee. Free services that stream music videos, such as YouTube, also get plenty of play. All the variants pay the record labels some portion of a penny each time someone clicks on a song.
10 Popular Music Streaming Apps - About
Streaming is obliging a creative but unrestrained industry to spend more attention to data. Nevertheless, people in the record industry are talking about another "golden age". There is bound subsequently to be a shake-out among the many new streaming services. But for the music labels, it now seems clear that, once the physical CD has ultimately gone the way of the wax cylinder, they will still have a beneficial way to exploit their catalogues, based on music fans being offered instant access to a near-limitless online jukebox.