How Streaming has Changed the Music Industry
The age of smartphones has made listening to music more accessible and affordable than ever before. From the Vinyl record, to the tape cassette, to the CD, to the MP3 – the age of the smartphone has brought the Music Industry into the age of cloud based storage. The industry leading streaming service Spotify offers over 30 million songs to choose from. Listeners can stream for free, and for a premium fee they can even save the music to their devices for offline play. Music Sales are dwindling as listener trends are shifting away from Ownership and closer to Access meaning that less and less people actually own the music they listen to, rather, they pay a subscription fee or listen through the occasional advertisement in order to temporarily license the music, just in that particular moment that they listen to it.
While digital downloads still exist, trends are shifting away from listeners actually owning copies of the music. Throughout the first half of 2016, consumers bought 13.6 percent less Album units compared to the same time period in 2015, which accounts for Digital downloads, CDs, and Vinyl Records. According to Billboard, 2016 has had the lowest album sales since they first began measuring sales in 1991.
More people are streaming music now than ever before, and the numbers only keep climbing. The total number of streams across all online platforms has increased from 71.6 billion in 2012 to 317.2 billion in 2015 while the Total Revenue generated in the Music Industry has remained relatively steady around $15 Billion USD over the same time period. Streaming is of great benefit to new and upcoming artists as a window of exposure to help their music reach a wider audience – considering that Spotify has over 100 million users, if the artist can make it into well known Playlists then they will be sure to reach new listeners and gain a great amount of exposure.
The bottom line is that many listeners want to get their music for free, so it can greatly benefit artists to get on board with streaming services so they can avoid having their music being pirated by these types of listeners. Though streaming companies such as Apple will benefit from the increase in subscriptions to their Apple Music service, they will also see a huge decline in Single Sales from the iTunes Store.
The biggest change in the streaming revolution has been the ability for the artist to publish their music almost instantaneously, circumventing the need to record their music to CDs or Vinyl records, they can upload their work to the internet and reach their audience at the push of a button . This is not only the most convenient method of distribution but also much more affordable than having to manufacture hard copies of their releases. Artists can also benefit greatly from the analytics that they receive from digital streaming services. The ability to have such great access to the digital environment allows artists to gain insight into how their listeners interact with their music like never before. Everything is trackable now and streaming services are making big efforts to help artists analyze their music to make better informed decisions around production and promotion.
The biggest challenge for artists will be to find a way to maintain economic sustenance in an industry that is shifting closer towards affordable access to mass libraries and away from paying artists directly for their releases. The number of paying subscribers to subscription services rose to 28 million in 2013, up 40 percent on 2012 and up from only eight million in 2010. Artists on Spotify do make about $5,000 per million streams so there is money to be made on streaming if the artist is receiving mass amounts of plays – but the most lucrative market within the music industry is touring. That being said, there is still plenty of room for profit and success in the music industry for smaller artists, but they must be both willing to release music,tour, and translate their recordings to a live setting well in order to capture a target market and success in the music industry.