Streaming Music vs. Downloading, 2014…

I. Total number of streams versus total number of downloads (2014)

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II. Total revenues from streaming versus total revenues from downloads (2014).

streamingvdownload2

*source: RIAA and Nielsen data. Streaming includes audio and video data from AOL, Beats, Cricket Wireless, Google Play, MediaNet, Rdio, Rhapsody, Slacker, Spotify, Xbox Music, YouTube, and VEVO.  Downloads includes transactions from iTunes, Amazon, and Beatport.  Data is US-based; one album download = 10 song downloads.  

Written while listening to Brooks & Dunn.

35 Responses

  1. Anon

    To do an apples to apples comparison, wouldn’t one need to track the total number of plays for each download and compare that number to the total stream count? Obviously this is not possible, but the stats above need some context.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      That’s one way to analyze, though extracting exact play counts from downloads, CDs, vinyl, etc. is extremely difficult. I think the total plays on both sides are surprisingly low, esp. per-person (and that goes for tracks from superstars like Katy Perry, Pitbull, Iggy Azalea, et al).

      Written while listening to Obituary.

      Reply
      • Alan Harris, Tune Takeout

        I agree with the above comments. Here again, what is missing from these stats is an indication of what happens to downloads once purchased. The first infographic is suggesting there is a difference in post purchase consumption between downloads and streams. We sell live music downloads and most of our customers report that they simply add their downloads to their playlists on whatever platform and stream away. @AlanCPHarris

        Reply
    • MickeyMac

      I think the point to focus in on is the revenue. It would appear that whereas streaming is beating downloads in the consumption category, downloads are beating streaming in the revenue category. Unless I’m wrong, I believe bolsters the argument made by many artists that streaming de-values their art – it may be that streaming is killing downloads, but who is making the $$$? It is my impression that artists make more $$$ per unit on downloads than streaming. I find it hard to believe that artists will get behind streaming until that changes.

      Reply
  2. Remi Swierczek

    Time to convert ALL streaming and ALL Radio to discovery based music store!
    Spotify, Pandora and iHeart Radio will instantly become multibillion dollar music stores.
    Multibillion dollar IPOs for Spotify, iHeart, Shazam, Soundhoud will be unavoidable!

    Pandora will quadruple overnight.

    Let’s do it label boys!

    Google will not only cooperate but will become helper let’s show Google the money.

    Reply
    • Remi Swierczek

      Streaming on demand not include Pandora, iHeart or iTunes custom Radio!
      We can have $100B music industry by 2020 at 39 cents a tune.

      Reply
        • Remi Swierczek

          I can not find willing to listen individual at RIAA or labels.
          All are intoxicated by streaming smoke pursuing hopeless pet projects.
          I can open the window and ventilate poisonous streaming gas but someone has to listen.

          Reply
  3. Anonymous

    And if you focused just on downloads and showed similar units and revenue charts for tracks vs albums you would see a similar phenomenon. What’s your point?

    Reply
  4. Anonymous

    these guys are using data and algorithms and crunching numbers in such detail and such analysis to only be given this kind of stuff is basically an insult, its pathetic, like ill ever trust anything any of those guys ever say again. unbelievable, good ol custodian corps saving the world again, one big data ream job at a time.

    Reply
  5. David

    Great graphs! I think it is important to keep in perspective that there are a number of sources of revenue for labels beyond sales (and streams). For instance, sync licenses have become an important source of revenue for labels, and they don’t report that data. Not to mention profit looks a lot different for downloads and streams than for the sale of physical goods (i.e., lower overhead). Furthermore, the record labels themselves admit that revenue is up this year. https://itakeoverbook.wordpress.com/2015/01/10/major-record-labels-see-growth-but-still-say-sales-are-in-decline/

    Reply
    • straight dope

      Sync licenses have ALWAYS been a part of the artists income. sync itself has fallen off dramatically too… and now that labels aren’t making money off downloads and physical sales, they’re taking a cut if the sync licenses (360 deal)… it has never been worse to be an artist..

      Reply
    • Paul Resnikoff
      Paul Resnikoff

      The sync numbers I’ve seen are mostly flat and unimpressive. Sounds like a nice revenue stream for many artists (Ari Herstand is one beneficiary), there seem to be a very finite number of slots that are well-paying.

      Reply
  6. Name2

    Why are video-stream transactions bundled in with the audio-stream transactions to arrive at a nice, juicy ~164 billion??

    Reply
  7. Different David

    I commented earlier, but my comment has not appeared. My point was that the streaming revenue estimate is probably overstated, because it uses an average payout figure of half a cent per stream. But the Billboard article itself quotes a lower figure of around .35 cents per stream in 2013, which is plausible if the streams include YouTube (and Pandora?) with their low payout rates. Using the lower payout average the so-called ‘modest gain’ would be wiped out.

    Reply
    • Jon Maples

      Payouts are an extraordinarily different number than revenues, Different David. Payouts come after expenses, contractual splits and a myriad of different factors. Revenue is how much the services pay the rights holders. If we could get both numbers, we’d be able to judge streaming as an economic vehicle. Until that point, we’ll be happy with our common practice of accusations and backbiting.

      Reply
  8. The real chart is much different

    It would include the major label advances and guaranteed minimum payments which couldn’t be reflected on this chart since they are all confidential and unregulated. It would increase the streaming revenues quite a lot though I imagine.

    Reply
  9. David Allan

    You would also need to include advances (label guarantees/minimal payments) and any revenues generated through advertising that are also shared to labels.

    Then you would see a more accurate representation of the income splits.

    But Paul…don’t let facts get in the way of a good story right?

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      This is actually a very simple set of pie charts; what you’re discussing is an additional layer that is important to look at but doesn’t conflict with the above. I think the top-level result on artist compensation revenue would be a bit grim: advances are not paid through to the artists, nor are percentage/equity advances in the event of a liquidation.

      Reply
      • Anonymous

        always with this artist thing, always only about artists when in reality artists take the smallest chunk and often times dont even get a cut…

        how about breaking it down in detail for the true splits, but hey, the good ol music badness wouldnt want to do anything like that would it?

        Reply
      • TruthSeeker

        Why would you say that showing advances and ad revenue “doesn’t conflict with the above.”

        The second pie chart above is labeled “Total revenues from streaming versus total revenues from downloads (2014).”

        How can you acknowledge that the chart does NOT include actual total revenues, as it says it does, and go on to say that that omission is not in “conflict” with what the chart is supposedly showing?

        Obviously, these charts don’t cover – and don’t claim to address – artist compensation, but they clearly do not include all “revenue” derived from streaming. Not at all.

        Reply
        • Musicservices4less

          Obviously, the major labels will most often have the advantage regarding receiving payouts (gross income and equity from major revenue sources because they control the most copyrights and “stars.” If you sign to a major and do not become a significant success the net payout to the artist will very low. Basic music business 101. This article really impacts the independent artist and labels. Most are struggling to stay in business let alone expand or make any significant profit. But quite frankly, that has always been the case. In the past when an independent artist hit it big, they went to a major independent or major label. Now there is an alternative to try and make it on your own. Those are the players that are getting hurt bad by these low payouts.

          Reply
  10. Jon Maples

    Where is the streaming revenue number from Paul? I hadn’t seen them, except for the mid year RIAA shipment report. Obviously Nielsen can’t report on revenue.

    Reply
  11. jw

    Clearly “transactions” is not a valid way to compare the two different formats.

    In presenting these two charts, you’re suggesting that the two charts should look essentially the same, which is to say that a stream should be worth what a song download is worth, which is outrageous.

    The way you choose to misleadingly frame data becomes more disappointing every day. And it’s almost too frustrating to even point it out since nearly every comment I post gets caught in the spam filter.

    Reply
  12. Hippydog

    to start off with, comparing downloads to streams 1 to 1 is nonsensical..
    its like looking to buy a vehicle and comparing a purchase VS a 5 year lease..
    “hey.. i can buy this vehicle 1 time, or i can lease it and buy it 60 times!” ..

    The problem with streaming (and with most of the music sales) is
    ITS ALL BEING SOLD FOR THE SAME PRICE.. 10 year old song that isnt even on the charts is being sold for the same price as the newest most popular song.. thats the part that doesnt make sense..

    Reply
    • jw

      I disagree.

      The only reason to charge less for a catalog track is to lower the interest threshold. That is to say, someone might not be interested in a classic album at $12.99, but they may be interested at $7.99, & you exchange lower margins for no margin at all.

      With streaming, there is no interest threshold… any song that’s going to be listened to is going to be listened to, regardless. So there’s no reason any play should pay out any more or less than another, unless you’re simply trying to skew the payout towards newer artists, which makes no sense to me. If an artist has leverage & is threatening to remove his music from a service, that’s one thing, but that only benefits the artist, not the industry.

      To whatever degree it’s possible, the streaming payout per stream should be equal across all plays.

      Reply

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