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Ben Sisario takes a stab at explaining the paltry royalty payments to musicians from music streaming services:

Like plenty of music fans, Sam Broe jumped at the chance to join Spotify two summers ago, and he hasn't looked back.

Spotify, which began streaming music in Sweden in 2008, lets users choose from millions of songs over the Internet free or by subscription, and is increasingly seen as representing the future of music consumption. Mr. Broe, a 26-year-old from Brooklyn, said that having all that music at his fingertips helped him trim his monthly music budget from $30 to the $10 fee he pays for Spotify's premium service.

"The only time I download anything on iTunes is in the rare case that I can't find it on Spotify," he said.

And there you have it in a nutshell, folks: the end of owning music. Let the new world of streaming - and never having to download another song - begin:

A decade after Apple revolutionized the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services like Spotify, Pandora and YouTube.

As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business.

That's the understatement of the year, at least from the musician's standpoint.

Sisario tries to bring out a little sunshine later in the article, but we'll have to wait and see if this comes to fruition:

Cliff Burnstein, whose company, Q Prime, manages Metallica and other major acts, said that even if streaming hurts sales, all is not lost as long as the number of paying subscribers continues to climb rapidly.

"There is a point at which there could be 100 percent cannibalization, and we would make more money through subscriptions services," Mr. Burnstein said. "We calculate that point at approximately 20 million worldwide subscribers."

Metallica recently announced an exclusive deal with Spotify.

If those subscriber ranks grow, royalty rates will also climb, recapitulating a process seen whenever new technologies have been introduced, said Donald S. Passman, a top music lawyer and the author of the book "All You Need to Know About the Music Business."

"Artists didn't make big money from CDs when they were introduced, either," Mr. Passman said. "They were a specialty thing, and had a lower royalty rate. Then, as it became mainstream, the royalties went up. And that's what will happen here."

With only 5 million paying customers online right now, we have a long way to go to get to 20 million paying customers.

The jury on this experiment is still out, for sure.

postscript: Sisario followed up on his article here:

http://mediadecoder.blogs.nytimes.com/2013/01/29/streaming-and-micropennies-the-footnotes/

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