Sources: Nielsen (2005-2015); Digital Music News projections (2016-2021)
Who downloads anymore? By 2021, the actual answer will be virtually no one, at least on a paid level.
Last year, paid song downloads dropped another 12.5 percent, according to preliminary details published by Nielsen Soundscan. In that past two years alone, the drop has been 23.4 percent, with paid downloads from sources like iTunes and Amazon dropping below the billion-mark for the first time since 2007.
Accordingly, the music world will witness a more dramatic download plunge in 2016, with 12.5 percent shifting towards 18 percent, according to conservative DMN estimates. The decline will subsequently accelerate to 25 percent in 2017, with a 40 percent drop anticipated in 2019.
The reasons for this aren’t mysterious: last year, the number of music streams doubled to 317.2 billion streams in the US alone, thanks to explosive growth across Spotify, YouTube, and Apple Music, among others. That is directly assassinating paid downloads, with Apple accelerating the plunge by aggressively pushing consumers towards Apple Music streaming accounts.
The rest, as they say, will be history, with downloads occupying a niche space in music listening experience, alongside CDs and other marginalized formats.
Meanwhile, future music fans will enjoy even better connections, better localized cache, and a far more seamless level of access to streaming, cloud-based music. Sounds like dramatic progress, except for the devastating impact it will have on artist and label royalties.
The math is stunning: right off the bat, a paid download accounts for at least 140 times the revenue of an equivalent stream, and that’s a best-case scenario based on aggressive per-stream royalty estimates. Independent labels, many of whom have wholeheartedly embraced streaming in the name of technological progress, will likely be the first group to suffer massive financial consequences.