Streaming Won’t Save the Music Industry Until 2019, Study Finds…

  • Save

Yes, streaming has created recoveries in countries like Sweden and Norway.  But its effect on the global market now appears limited, at best.

According to data just released by MiDIA Research, recorded music industry declines won’t level off until at least 2019.  “The long term outlook is a story of revenue transition and incumbent revenue decline,” the MiDIA report bluntly assessed.

“Music industry revenues will bottom out, not grow.  Physical revenue will decline by 44% by 2019 while streaming and subscriptions will help push download revenues down by 39% over the same period.”

  • Save
 Streaming Isn’t Saving the Music Industry After All, Data Shows

And, things will bottom out only if streaming grows and matures beyond a niche-paying sliver.  “Streaming and subscriptions are the great hope and are growing at unprecedented rates,” report author Mark Mulligan continues.  “But the $9.99 products are not enough on their own, affordable mass market products are needed too.  Without them revenues will shrink at pace and scale.

54 Responses

  1. Anonymous

    “That is, only if streaming grows “

    And that’s a big if.

    • GGG

      Better than the alternative that’s shrinking. Unless you want to throw all our weight behind vinyl. Seems like a better alternative than DLs at this point…

      • Anonymous

        Streaming is not an alternative to downloads in the real world.

        • GGG

          I don’t think anyone has ever really said (honestly, at least) streaming rev will ever get back to 90s levels of CD rev, but it can certainly grow substantially. Shit Spotify numbers are still generating some nice chunks of change for artists. Imagine twice or three times as many.

          • Anonymous

            “Imagine twice or three times as many”

            “Imagine there’s no countries
            It isn’t hard to do
            Nothing to kill or die for
            And no religion too
            Imagine all the people
            Living life in peace”

            Meanwhile, in the real world: Audio-only streaming is worthless for artists. You can’t make a living as a recording artist without iTunes sales.

          • GGG

            Ok, so 2-3 times as many streaming customers, or a tenth of what goes to youtube every month is some incredibly unreachable dream, yet reversing a decade plus trend of deflating album sales is perfectly fine? Well, I guess since Yves disappeared and TuneHunter just says the same thing over and over we need a new crazy person around here.

            Oh wait, but I forgot your brilliant plan; Just Stop Piracy. Forget it was that simple. My bad.

      • El Vistor'

        Well, it’s not really saving the music industry in 2019, that’s just when we hit the NEXT bottom…

    • jw

      The growth rate of streaming may be uncertain, but the continued decline of CDs & digital downloads is certain.

      Without streaming, things don’t look very pretty.

      • Anonymous

        Without selling, you can’t make a living as a recording artist.

        • There is something...

          You can’t sell if nobody want to buy.

          • Versus

            How can we determine that “no one wants to buy” when frillegal is an option?

            Piracy warps and distorts the market beyond any sense of “fair”.

            There is clearly demand for music; so many would pay for music if frillegal were not an option.

          • Anonymous

            “You can’t sell if nobody want to buy”

            Here’s the good news:

            Taylor Swift, Beyoncé, Adele and many other successful Spotify holdouts have proven that millions of fans buy the music they love if they can’t stream it for free.

            It’s fantastic, but it’s true — the proof is in the numbers — and it completely contradicts the old Spotify lie that fans would steal songs that are not available on Spotify.

          • GGG

            Serious question; are you legitimately delusional or did you read The Secret and just keep repeating this stuff hoping it comes true? Streaming numbers are pretty small, as you and others say over and over. DLs aren’t going to disappear over night. That’s not how most tech shifts work. iPhones weren’t ubiquitous until what, the second or third one? You can’t use the biggest artists on the planet to prove people still buy music. Of course they do!

            Show me some bands staying off Spotify who are selling 20K records. Show me some indie bands who aren’t on Spotify selling 200K. Use something besides the people who can sell a record of them taking a shit, because they are so big.

          • FarePlay

            GGG. My question to,you is why are you and JW here on every discussion that relates to streaming, saying virtually the same thing? Why is everyone “dillusional” who doesn’t agree that streaming is it. Game over, done deal.

            There is something unnatural about the amount of time you keep repeating the same thing over and over.

          • GGG

            Says the guy who also repeats the same shit over and over.

  2. Anonymous

    Copyright laws will likely be rewritten by then as well…future looks bright for my kids.

    • smg77

      Are there people out there that actually think copyright laws are going to get redone anytime soon? Have you noticed the state of the US congress lately?

      • Anonymous

        I’m another ‘Anonymous’, but yes — copyright laws (and enforcement) will be modernized in the US and EU in the near future.

        • Anonymous

          There is no sign that congress will pass any major changes to copyright law in the foreseeable future. If you are referring to the treaties, that is going to be a complete mess for years. Even then, it won’t change much of anything in the near term. Downloads/physical will continue to fall. Streaming will continue to grow. Piracy probably won’t even be much of a concern by 2019.

        • There is+something...

          The problem is that law is always years behind technology. At the time new laws fill be enforced, people will have already access to a different technology that makes law obsolete.

          • TuneHunter

            All copy rights regulations, active and those in the woodwork, should be scraped ASAP.
            All new activities in that area is just attempt to poke few darts to just some parts of almost dead animal!

            All we need is NEW FAIR USE DOCTRINE. It will make music merchandise again by evicting mooches like Shazam and other music and lyrics ID guys from THE MUSIC HOUSE.

            Bright and profitable future in front of those industrial nerds if we can lobby in new fair use act.

          • There is+something...

            Man, you should stop drugs, really…

          • TuneHunter

            Drugs have been found at UMG – the main force responsible for demolition and current state of music industry.

          • GGG

            Nobody else in music does drugs. Just people at UMG. Scandal! What are you going to tell me next, people in finance do drugs? Never!

      • Anonymous

        I’m the initial Anonymous, and yes, if you had caught the hearing at the judiciary committee a couple of weeks back you would know that there’s a great deal of momentum towards reform.

        • TuneHunter

          If you calling in reform I will call 5 year plans in USSR the greatest business plans ever made.

  3. TuneHunter

    Norway and Sweden nirvana states of streaming are after inflation adjustments 40% smaller than in 1999.
    Main media like Billboard or Guardian is blinded and abused by Spotify PROPAGANDA MACHINE.

    There is simple solution to total INFERNO of MUSIC INDUSTRY: conversion of Radio and streamers (Pandora, XM and Spotify too) to discovery based music stores. With help of over 2 billion users of music and lyrics ID
    services converted from looters to grabbed by the face buyers we will double the industry in 24 months.

    If we can get new FAIR USE DOCTRINE to force Google advertising monk to same mode we will have $100B music industry before 2020.

    • Ed

      Please explain further how this will happen. Not being coy genuinely interested in the model you put forth.

      • TuneHunter

        Just Google “discovery moment monetization”

        • Anonymous

          “Discovery Moment Monetization (PATENT PENDING)” … care to elaborate?

          • Captain Obvious

            “We won’t tell you what that song was unless you pay us for the information.”

        • G

          What if they kept the subscription model, but instead of paying $9.99 a month for full access, they make it so you have to buy one album a month to get full access to the millions of songs. The streaming service would get a cut out of the sales. Streaming and download sales would both rise.

          • jw

            This is a terrible idea. That idea totally undermines the democracy of streaming & will favor paying Top 40 acts, starving smaller artists.

            You might as well just require all streaming services to charge $10/mo, & allow X amount of permanent downloads per month.

          • G

            Yeah… because indie artists are making so much money off streaming services from royalties… Streaming mostly favors Top 40 anyway. And Bandcamp already proves that consumers want to support indie artists. Yeah, more sales would go to major artists, but isn’t that where most royalty payments go to anyway? I bet even some indies would make more than they would off the dismal royalties they receive from services like Spotify. This would pump more money back into the artist community. Let’s hear your ideas.

          • TuneHunter

            If you allow Radio and streamers to make money at the discovery moment they will go crazy to dig and serve you the best and unknown staff. Streamers and Radio DJs will become the best promoters of new music.

            Playing to you 20 times a day Lady Gaga that is part of your playlist will not enrich them, so they will deliver brilliant selection to fans and cash to artists. Cash has to become the catalyzer of music monetization.

          • jw

            Which stations drive more sales? A bold station that takes chances & plays a variety of music? (Like KEXP or KCRW, for instance.) Or the Top 40 stations that drill songs into people’s heads through repetition?

            Obviously the Top 40 stations. “Discovery moment monetization” wouldn’t change anything.

            You’re completely out of touch with reality, TuneHunter. And your spiel is getting soooo tiresome to endure.

          • TuneHunter

            Just listen to some stations on XM to see what brilliant DJ can do.
            You can have both outstanding subscription free Radio stations (custom made for you like Pandora or Spoofy) and money to music industry as you listen to it.

          • jw

            A lot of indie bands ARE making money off of streaming & have grown to depend on that revenue. Ask around.

            With bundled & even individual purchases, there’s a built-in advantage for tiny bands. An indie album that may or may not be cheaply/poorly recorded, or may or may not only have just a couple of good songs costs as much as a big budget Beyonce record that a consumer might listen to regularly for years. You’re getting more than what you paid for with Beyonce, & maybe less than you’re paying for with certain indie releases. So streaming evens the playing field, & you’re paid in direct proportion to the interest in your music. So to redistribute payouts away from the artists who are actually making inroads towards popularity, to handicap or penalize those bands, is one of the worst things you could do for the industry, & discourages artists from retaining ownership of their recordings & maintaining a small, efficient team, & forces artists to sign their music away to major labels in exchange for peanuts.

            My idea is to give it time. The upside to mainstream streaming is potentially gigantic, but format changes don’t happen over night. After all, Napster, and effectively the mp3 format, launched in 1999, & the iTunes store didn’t launch until 2003, and operated at a loss for several years. So while overall recorded music revenue began to drop off after 2000, iTunes didn’t really start to plug any holes until more than halfway through the aughts, & sales continued to drop until… if the study is to be believed, 2019. But what’s clear from looking at the graph is that streaming is much more effectively plugging the hole than digital downloads were, & I’m much more optimistic about streaming than Midia seems to be.

          • G

            Just want to clarify that my idea is not meant to take money away from the artists. Of course that is the worst thing you can do. I was just saying to continue with streaming/paying out royalties alongside replacing subscriptions with consumers purchasing an album . This would kind of artificially increase digital album sales while streaming would still continue to grow. Spotify would take like 10%-20% of the album sale. They currently take 100% of the subscription but then redistribute to artists through royalties. In theory, this would give more money back to artists, but would leave Spotify with more payouts and way less revenue which isn’t sustainable either. It was a very quick idea, but with time, the industry or someone will figure it out.

          • G

            Just want to clarify that my idea is not meant to take away money for the artists. Of course that is the worst thing you can do. I was just saying to CONTINUE with streaming/paying out royalties but replacing subscriptions with consumers purchasing any album of their choice in exchange for ad free listening. Spotify would take like 10%-20% of the album “subscription” sale. Currently, they take 100% of the subscription but then redistribute to artists through royalties. Top 40 inherently will make more. You have 30 million fans and convert 1% that’s 300,000 in albums sold. For the indie artist, say you have 1000 fans, you might sell 10 albums. That’s 80 bucks made for the artist after the 20% cut to Spotify. Just an example, but it would add another source of income for the artist in addition to royalties and would incentivize the consumer to buy the album in return for no ads.This would not hurt the democracy of streaming because I never said to get rid of it. I’m talking purely the subscription model. It’s almost artificially increasing digital album sales. In theory, this would give more money back to artists, but would leave Spotify with more payouts and way less revenue which isn’t sustainable either. It was a very quick idea, but with time, the industry or someone will figure it out.

  4. danwriter

    “Yes, streaming is reversed avalanching sales stories…”

    Who wrote this, Yakov Smirnov?

    • TuneHunter

      Probably Guardian or Billboard the captive propagators of Daniel Ek “proven business model”

      • danwriter

        There’s an irony here that I’m not going to point out.

  5. Willis

    It’s like throwing the industry a cement lifevest.

    • TuneHunter

      The best short summary of streaming to date.
      Thank you.

  6. Nissl

    If you look at other reports from the same company on the previous decade, the big decline in recorded revenue was roughly offset by growth in live revenue and merchandise. I wonder if they’re projecting continued growth in those sectors. If so, a flat recording segment would finally lead to a return to overall growth in the next few years.

    They also have some fairly persuasive arguments that more than anything else music has lost revenue not on pirates or cheap streamers but people who are playing more games and watching more TV instead. The music industry has to be there and competing on convenience.

    • FarePlay

      “They also have some fairly persuasive arguments that more than anything else music has lost revenue not on pirates or cheap streamers but people who are playing more games and watching more TV instead. The music industry has to be there and competing on convenience”

      Humans don’t make decisions about the use of their time based predominantly on convenience. The analogy that music has lost its’ following as a result of convenience is a knuckleheaded observation and to claim that piracy has had only neglible impact on the entertainment industry is rediculously.

      It appears that DMN is attracting more freehadists every day. I also find it revealing that so many support Spotify with its’ Napster roots. I do commend you for finding a new business model only marginally less distructive the piracy. Yet wasn’t that the hoped for end-game of the original Napster after all?

  7. FarePlay

    This graph is way to optimistic for the future of streaming.

        • FarePlay

          That’s funny. If the streaming proponents would humor us luddites by talking about streaming as the ultimate discovery medium to help sell music and maximize connectivity to the sales channel you could change the entire conversation. Right or wrong, being adamant about the death of paid downloads and sales of physical product creates a lot more pushback from those of us who don’t see that working for artists.

          It also enforces the same perception that was so damaging from piracy. “Why the f… Would you pay for music, are you an idiot”. Actually getting young people embarrassed to pay for music even if they thought it was the right thing to do.