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Music has long appealed to humans and thus has been a trade since the dawn of civilization and an industry since the 19th century. Until this later date, musicians and composers would have their income provided either by performance fees as musicians or conductors or by being sponsored by the upper classes, nobles and clerics.
The industry was born with the introduction of the sheet music publishing in the late 1800s and quickly expanded with the invention of the phonograph (in a process that included geniuses such as Edison, Bell and Volta). Music had become available to the masses, a phenomenon that was further expanded with the beginning of commercial radio broadcasts in the 1920s, and with minor changes (shellac to vinyl, TV, pop culture) continued to grow, in a stable and analogue world, into a multi-billion dollars solid business.
But the world keeps spinning and the sum of two major breakthroughs: 16-bit PCM digital audio recordings in the 1976 and CDs in 1982 (Phillips & Sony), made possible another revolution in the business: Digital Audio had arrived.
The late 80s saw a quick migration into Digital and other major events came that would impact the music business: i) The Internet ii) MPEG-1 Video standard and its Audio Third Layer (aka MP3). If for a time the Digital brought increased income to the Industry (by the effect of re-selling back catalogue in new media) by the late 90’s the combined effect of PC increased storage and processor performance, internet wider band and maturity in internet tools popularized MP3 as the de-facto Digital portable standard.
If in the beginning this hardly impacted sales, since people were basically ripping bought CDs to have a centralized library of music to listen in the PC, the appearance of Napster in 1999, which was the 1st important Peer-to-Peer (P2P) file sharing Desktop Software, had the impact of a meteor hitting Earth. This allowed everyone to be able to share their music libraries and access the libraries of other peers connected to Napster.
The impact was massive to the business. If on one hand it may have helped to improve promotion of new artists the truth is that it led to a trend of decreased sales that by the end of the 2000s was of 50%.
The free Napster service was banned in 2001 but by that time tech-aware consumers were no longer used to pay for music and moved into 2nd and 3rd generation P2P solutions like Kazaa and later torrents, like BitTorrent or uTorrent.
The industry reacted in two major fronts:
1) Digital Rights Management: Both by creating software schemes to avoid or limit the copy of digital content and in parallel enforcing in law as new crimes both the share of DRM protected content and of producing/selling/sharing of any “DRM-break” software.
2) Starting selling Digital online and providing with portable music devices, a movement led by Apple with its iTunes and iPod couplet
Despite all the above the consumers, especially a new generation that has never had to pay for music, needed to addressed with new strategies and approaches.
In 2006 a new concept was created and developed in Sweden by Daniel Ek. What if instead of providing ownership consumers were given access to play anywhere and at any time whatever music they wanted? On top of this, consumers could create their own playlists and share them in social network sites like Facebook. After all, music, besides the immediate listening pleasure, has always had major social integration connotation (“cool music for cool people”).
These new services, that the industry calls “Subscription Services”, and for the purpose of this paper we use the more technical name of “Audio Streaming”, are the scope of this document.
Before we enter the detailed description of its technical and business components here's an overview of these new services:
- A centralized server has a database of millions of songs encoded in an audio codec(various are used) with various options of quality depending on the provider, media where it's played and the level of subscription
- Users gain the right to access these songs by subscribing to these providers, normally with three levels (free but with ads, standard or premium).
- Access in by a web-page or by a desktop application, allowing the creation of playlists that are accessible to any user and that can be shared in social networks, blogs or websites.
- Songs are accessed by the consumer user in a mix of Client-Server, peer-to-peers and local caching.
- Revenue to record labels, recording artists and songwriters comes from money the companies receive from advertisers and subscriptions.
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