If Streaming Is Growing So Fast, Why Isn’t the Music Industry?

Streaming is exploding this year, across all format types: paid, ad-supported, and online radio…

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But paid subscription growth is actually slowing…

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Paid downloads are starting to slide…

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CDs are seriously tailspinning…

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And the US recording industry is declining overall…

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Any questions?

 

21 Responses

      • Remi Swierczek

        As a person who grew up under communism I have to tell you that old Pravda was less biased than today’s
        Fox, CNN or ABC. Americans are most under informed and misinformed society!

        Back to music, GLOBAL LIMIT OF SUBSCRIPTION STREAMING is at $15B and streaming prevents more logical methods of monetization. Time to get new fair use act and convert Radio, TV and streaming to simple $100B music store. If we don’t do it Google soon will convert half a trillion dollars of VALUABLE MEDIA to $20B in ads.

        Reply
        • Gnome Sane

          Yes, for sure there is billions of easy money out there for the taking. Business people are supposed to want to make money…why wont they jump on this????????

          Reply
          • Remi Swierczek

            It requires cooperation of INTOXICATED by digital ads GOOGLE or new fair use act that will bring sanity to MUSIC GAMES! In the era of internet name of the song or few lyrics makes you an owner of the SONG!

            Only Google can change the game or UNITED effort of VERY UN-UNITED but still very strong POLITICALLY music industry to force GOOGLE to new happy and profitable for everyone future.

      • Danwriter

        Paul: These distorted graphs are simply editorializing and undermine the credibility of the reporting. It’s like reading it in the NY Post.

        Reply
        • Paul Resnikoff
          Paul Resnikoff

          I’m just the messenger, but okay, I’ll address your complaints about the graphs. That’s really just the way Apple Numbers defaults on the axis, and I didn’t have enough time to figure out the adjustment as I’m just learning it. But that said, they are factually correct, you just don’t like the presentation.

          Reply
          • Derek

            The presentation is what MAKES it misleading. The way “Total Paid Downloads” is framed, it appears to have lost 90% or so graphically. Whereas several other graphs start from 0 on the Y axis. At the very least, it APPEARS to be editorializing/misrepresentation, and at the worst it IS exactly that. I’m on your side regarding streaming, but this type of “journalism” isn’t particularly helpful.

    • Faza (TCM)

      It isn’t so much a scam as a price-reduction mechanism. Streaming subscriptions are primarily cutting into the spending of those who were already spending as much – if not more – on music purchases, whilst free, ad-supported streaming is providing a better bang for the buck to those that weren’t. Any “converted” pirates are unlikely to change the picture much, since they are more than likely to be switching to the free services and the revenue from those is capped at what advertisers are willing to spend.

      This really should come as no surprise. In essence, streaming is working just as designed.

      Reply
    • One Word : CANNIBALIZATION

      Seriously… the math doesn’t work and it never will the way it is structured… You need 90m PAID at $10 a month to = current revenues. How close to that are we? Oh, nowhere close? Welcome to the death spiral to a $3b record business in two years… F’ing genius braintrust at the major labels.

      Reply
      • superduper

        That’s very true. Is there any explanation into how exactly the media is spinning this in such a positive light? I swear the news media is run by tech companies now.

        Reply
  1. DavidB

    It is puzzling that revenue from paid subscriptions has increased by about 20% while the number of subscribers has only increased by 2.5%. That implies that the average revenue per subscriber has increased by nearly the whole 20%. I don’t think there has been any increase in standard *rates* per subscriber over this period, as the standard premium rate has been steady at $10 a month. Presumably much of the increase is due to more people using full premium services instead of cheaper options with more restrictions (e.g. on mobile access). Indeed, Spotify seem to have cut out their intermediate $5 a month option, though I don’t know whether users who were already on that option have been forced to upgrade. The other complication is the position on cut-rate introductory offers. If a lot of people who were on cut-rate offers in H1 2014 have stayed with the service and moved onto full rates, that could account for the increase in revenue, as in many cases the increase per head would be much larger than 20%. On the other hand, one would expect there to have been many people on cut-rate offers in H1 2015, e.g. Spotify’s notorious $1 for 3 months. Or maybe these are not being counted as paid subscribers? It all deserves closer investigation. On the face of it, the sharp deceleration of growth in subscriber numbers is both surprising and worrying. It’s surprising because Spotify, in particular, was reporting such strong growth in numbers in late 2014, and it’s worrying because it leaves little expectation of further growth in revenue

    Reply
  2. Rickshaw

    Because streaming is about the full music spectrum and sales are mainly based upon re-issues (not many) and new released (mostly crap).

    Reply
  3. Chris Daniels

    STOP THIS !!!! Why do you continue to do this !!!!!!!!!!!!

    The “Music Industry” is not the distribution and sale of master recordings. That is only one measurement of an industry that is growing in ways that you continue to miscalculate and misrepresent. Concerts, Sponsorships and Endorsements, “use” of music (Publishing) are all much more important than the record business – and what is startling is that you seem to discount the relevance of these trends. It’s like the people who cover the auto industry – yes it is true that the car industry once centered in Detroit has suffered a catastrophic setback but in that area — but the auto industry itself is not just Detroit.

    PLEASE PLEASE STOP calling the sale of recordings “the music industry” it is not the music industry — it’s the record business – AAUGH !!!!

    Reply
  4. Not Even CLOSE To Actual "Journalism"

    Why do they continue the ridiculously ignorant practice of referring to just the record industry as “the music industry”?

    For the same reason that they continue to present totally misleading graphs, often introduced with utter click-bait headlines.

    Because this site is so far from presenting anything close to responsible journalism – or even a moderately informed or balanced perspective – that its pathetic.

    Reply
  5. Kevin

    Whether the graphs are accurate or not the trend is definitely there and the article, although flawed, still explains that the entire entertainment industry, music, movies and TV, is being turned upside down.
    Like any revolution there are winners and losers. Winners are those who read the market the best and implement innovations that capitalize that market. Loser are those who simply cannot abandoned there old ways.
    SO instead of sitting around whining about the “Good Ole Days” they are gone. Take a risk. Do something new. Start really working for your money as the days of sitting on one laurels and collecting that annual royalty check have gone.
    Deal with it.

    Reply
  6. Ted Pearce

    If streaming is the new radio, then it should work on the radio model where advertisers and sponsors pay the bills…not the listeners.

    That way they could afford to pay the SONGWRITERS and the labels would be making more royalties to pay the artists. I think the world does need a new “radio” in the digital age, and streaming is like a station that covers the entire world…a win/win situation if done right.

    Reply
  7. Matt

    It would be nice if radio djs would quit playing music only from the major labels and give us littler people the chance to become exposed. I can’t stand these huge top 40 stations because it seems that only the major artists get played and it’s the same two or three artists. Give the smaller people a chance too! We’re just as talented as those Barbie dolls on the major labels who think they can sing but are really nothing more than marketing hype! I’m sitting here busting my ass to make it big in the music industry and it seems that artists like Katy Perry don’t even have to try and they just get number 1 hits? Really?

    Reply

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