Streaming: The saviour of the music industry?
The US music revenue has risen for the second consecutive year – marking the first two times that there has been a substantial increase since 1999, according to an annual report by the Recording Industry Association of America (RIAA).
This dramatic change has occurred in recent years mostly due to the arrival of streaming services like Spotify, Apple Music and Tidal. It was only a few years ago that music executives and artists were claiming that streaming would be the final nail in the coffin for the dying music industry. And while there are still claims that artists are under-compensated for their contributions to the services, it is clear they have brought a new lease of life to the industry. The report showed that there was a rise of 16.5% to $8.7 billion in 2017, the highest it has been since 2008. Music streaming subscriptions have played a role in this growth, with figures more than tripling in the last four years.
While streaming numbers are on the up, the report claims digital sales saw a significant 25% decrease for the year – illustrating how the use of streaming services is leading to a decline in the purchasing of digital and physical songs and albums. In 2016, the RIAA announced they were including audio and video streams as part of their gold and platinum certifications. Despite the radical move this was considered at the time, the industry has come to embrace the format, as it more accurately reflects the way that people are consuming music today.
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Despite the growth in revenue, artists and streaming services are still not adequately compensated for the volume of listeners that enjoy the music. According to RIAA Chairman and CEO Cary Sherman, this has resulted in a ‘value gap’: “the gulf between the amount of music being consumed and the compensation that platforms return to music creators for exploiting music.”
Of the nearly $9 billion in revenue from 2017, $5.7 billion came directly from streaming services, representing the largest recorded music format in terms of value. The steady rise is certainly worth celebrating, but it is important to note that the figures are still only at 60% of the music industry’s peak level.
Spotify has been making headlines on its own recently, after debuting on the New York Stock Exchange to the value of $26.5 billion, a figure higher than predicted. In fact, Spotify is now worth more than Twitter, Snapchat and Dropbox. With more than 70 million listeners worldwide, it is by far the most popular music streaming service. Apple music trails behind in second place, with just over half that amount.
In order to understand their streaming habits, I spoke with a few students – the generation considered responsible for the rise of music streaming. This is what they had to say:
Q1: What music streaming service do you use?
Results show all participants use a streaming service of some sort. Spotify proved to be most popular, with 40% claiming to be active users. 20% admitted to using Soundcloud, 20% use YouTube and 20% Apple Music.
Q2: How much do you pay? Is this reasonable?
While all participants thought the price they paid for streaming services is reasonable, there was very little range in the amounts – 60% paid £5.00 and the remaining 40% took advantage of free services such as Soundcloud and YouTube.
Q3: Since using streaming, have you found that you listen to music more often?
I was curious to know whether having streaming subscriptions encouraged users to listen to music more often than before they began streaming. The results show the participants unanimously answered ‘yes‘ – citing the variety of choice as the main reason.
Q4: Do you like the service you use? If so, what is it you like most?
There was another unanimous result among the participants when asked whether they like the service they use, they all answered ‘yes‘. When stating what it is they like most about the service they use, there were a few key words that stood out: ‘easy‘, ‘cheap‘, ‘recommendations‘ of music, ‘variety‘/’choices‘ and ‘simple‘.
Q5: Have you discovered any new artists from the streaming service?
Most participants mentioned they often discover new artists on their choice of streaming service – crediting playlists for introducing new talent or recommendations of new music. One interviewee had experience with both Apple Music and Spotify, and stated that Spotify was superior when it comes to discovering new artists:While there is still plenty of uncertainty surrounding the world of music streaming, it seems like the ‘trend’ brought about by the millennial generation is likely to stick around for a while. It is difficult to predict exactly what impact it will have in the long run, but for now at least, streaming is the saviour the music industry has been crying out for.