The era of owning music is ending. The Streaming Music Revolution is here. Easy access to music you love is now more valuable than ownership.
It goes beyond music. What’s really ending is the need to own things, all kinds of things, just for the sake of having them.
My friend Gary, who sells antiques, says business is bad. His older clients want to sell their collections and downsize but younger buyers are not there. With a few welcome exceptions, he says, “The next generation is not interested in owning artifacts.”
It’s not just antiques, Gary. It’s the way the next generation thinks about owning many kinds of artifacts. Cars, houses, books, music, you name it, they don’t want it.
I’ve been cruisin’ round the town now
With the guys for quite a while
Oh, we been thinking about starting up a club
That shows some class and style
And we’ll get the finest cars…
– The Beach Boys, Our Car Club
There was a time when the car you drove mattered. Your set of wheels showed you had “some class and style”. The more flamboyant, the better.
Millennials do not buy cars to soup them up and show them off. That’s what you do with your Pinterest board or Facebook cover photo. As Bob Letsetz says, cars have become “a utility”.
To the younger generation, cars are transportation, nothing more. They take you from a to b.
No class? No style? No problem.
This recent chart from the Census Bureau tells you what you need to know about the US homeownership rate.
The homeownership rate has declined steadily since the start of 2005. This year, according to U.S. News, homeownership among millennials fell “to the lowest level in recently recorded history“. Compared to preceding generations. millennials are renting more, living with parents more and buying less.
When millennials do buy homes, they opt for convenience, efficiency and low maintenance. Houses have become a utility, too. My wife and I owned a real estate company not long ago. We found few younger buyers interested in artifact homes.
Amazon Kindle bestsellers don’t just outsell Amazon physical bestsellers, they outsell all physical bestsellers sold by all distributors. By a wide margin of unit sales. A margin that grows wider when you add Apple iBooks and others. A margin that become a chasm when you add Amazon’s long tail of books available only in Kindle editions, like this Spotify guide.
Readers do not actually own ebooks. Readers merely buy a license to access their ebooks on their devices. It just feels like ownership.
This summer, with Kindle Unlimited, Amazon has replaced even the feeling of ownership with easy access. When major publishers get on board, Kindle Unlimited could become a literary Spotify. Welcome to streaming books.
The same thing has happened in movies, in software… and in music.
Paul Resnikoff at Digital Music News (great website and Facebook page) has charted the US music market from 1973 through 2013. Recent years in Paul’s music chart, compiled from RIAA date, look like the Census Bureau’s housing chart, only worse.
Paul’s chart shows the trend of music distribution from owned artifacts like vinyl to more convenient forms of ownership (8-tracks, cassettes, CDs and then downloads) to free and paid streaming music, a utility you access whenever you need it, wherever you are.
Like it or not, the trend’s painful impact on the music market in inflation-adjusted dollars is clear. This trend has continued in 2014, as the chart in this Rock Around The Web post shows. This year, digital downloads and CD sales are plunging while streaming music is up big-time.
End of an Era
What’s ending is not just the reign of a format. What’s ending is the whole era of owning music. In 2014, your favorite songs are so convenient to access that there is no need to store them on your shelf or your hard drive.
Not surprisingly, music sellers, whose best years relied on consumers paying $16 for a CD with a couple of must-have songs on it, have struggled to deal with the pain of ownership’s decline. They wasted a decade going after Napster and Grokster and 12-year-old music sharers. They won the battles and lost the war.
I feel their pain. I spent years building a collection of vintage vinyl, first 45s, then LPs, sifting through piles of dusty Herb Alpert & the Tijuana Brass albums in second-hand stores to find elusive rock albums and obscure blues compilations. More hours and dollars went to CDs and downloads.
I believed in music ownership. How many times can you buy the same song? Let me count the ways.
Today, anyone who can spell y-o-u-t-u-b-e has a better music collection at their fingertips than I amassed in a lifelong quest. And who wants to haul around a ton of records (literally) when it’s moving day?
Would I do it all over again? Of course not. Why spend money, take up space and squander time building a collection that’s already available at my fingertips? Your fingertips, too.
A Primary Trend
Like its customers, the music industry has come to understand that the change in listening habits is here to stay. Even long-time holdouts like the Eagles and Led Zeppelin now authorize Spotify to stream their songs. Not even they could stand against the cultural shift away from ownership and toward easy access.
Ironically, earnings from sales of vinyl LP’s are also up, but vinyl is still a niche market, a sliver on the chart. The current interest in vinyl demonstrates how unusual music artifacts have become.
Everyone sees a piece of the trend. The antique seller, the car seller, the real estate seller, the bookseller and the music seller see the same trend. It’s a primary trend transforming many facets of the way we live.
Do you read the Letsetz Letter? You should. Physical items, Bob Letsetz wrote a recent post about “Stuff”, are “fading in importance”:
Could it be that the culture of consumerism, which has driven the engine of America, is history? Or to the degree it survives, is it purely virtual?… Once you have the tools to access your data, do you really need anything else?
We still own things. We are not nomads. But Bob Lefsetz nailed it: now that we have the tools, easy access is more valuable than ownership.
(Photo of red Cadillac circa 1959 used by permission of Kevin M. McCarthy / Shutterstock.com)
4 thoughts on “Music Ownership Is Over”
Nice blog, and I agree with the conclusions. Want to buy some classic vinyl?
Thank you for your comment, Bill. Hang on to your vinyl. It may not be fun to haul around, but it’s still great to listen to.
Nice blog, Les. You are certainly right about music. As the latest Nielsen report shows, during the past year streaming increased by 30 to 40%, and paid downloads (i.e., ownership) declined by around 12%.
But when it comes to housing, the graph and your discussion are very misleading. Or to put it less gently, your basic assertion that people (millennials or any other group) are less interested in owning a home is simply wrong. Look at the graph. The increase up to 2004 or 2005 was the housing boom, much of it driven by banks happy to give a mortgage to anyone with a heartbeat. And the decline is because of foreclosures and a deep recession. Yes, millennials are living with their parents instead of buying a house, but not because they want to — they have no choice.
Finally, there is no real evidence that there is a trend away from ownership in general. Sales of antiques may be down, but sales of motorcycles, boats, bicycles, clothing (including expensive suits), smartphones, expensive Swiss watches, jewelry, … are up. People still want to own things — just different things.
Thank you for your comment, Professor Bob. It is always a pleasure to hear your opinions, even when we disagree.
The housing graph comes from the US Census Bureau. The trend it shows is real. The graph’s shortcoming is that it does not break out age groups. Millennials, most of whom were too young to buy during the bubble a decade ago, have been buying homes recently at a record low rate.
The interpretation of the housing graph is, well, subject to interpretation. I agree with you that the one-two punch of tighter mortgage lending and a weak jobs market has forced some millennials to rent or move back with their parents because it’s their only choice. But, as a retired real estate professional, I can tell you that there’s more to the story.
The economy is shaping values and attitudes, not just choices. Despite the many first-time homeowner programs, some millennials who qualify for financing simply do not want to buy. Others buy a home, but they choose convenience over craftsmanship, easy maintenance over fine woodwork. The new generation of homebuyers, as I indicate in the post, tends to view homes as a utility.
Millennials living in their parents’ basement are probably not the people buying expensive suits, expensive Swiss watches, boats and jewelry. They are, however, well represented among the people standing in line to own a new smartphone. But that’s the point. Generation App values access more than ownership. Houses, music, books and many other things our generation prized are becoming more like utilities. Especially among the young, ownership for ownership’s sake means less today.