By 2021, the Paid Music Download Will Be Dead

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.

Source: Nielsen

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.

22 Responses

  1. Anonymous

    I like that the 2015 data arrow is pointing at the 2016 bar

  2. Anonymous

    Physical vinyl and CDs will still be bought by hardcore fans, but for most people, there’s no reason not to get their casual listening experience via streaming.
    Better get those royalty rates figured out FAST, people…

  3. Anon

    Didn’t they say this about CD and Vinyl ?

    The thing is the download is or can be higher quality than the other formats, and it’s more flexible in terms of locals and media, so I really doubt it.

    I for one will never pay for Apple Music or Spotify, nor will my own music ever be on either one since they don’t pay.

    • Paul Resnikoff

      Yes, they did say that about vinyl and CDs, and they were right! Vinyl did die somewhere in the 90s, and became a tiny niche for DJs and hip-hop heads. Then it came back from the dead.

      The CD is heading towards the sunset. It’s just taking a long time.

      That said, I hear you: downloads could retain some niche down the road. But even that is speculative, given that the actual difference between a future, cloud-enabled download and a stream will be increasingly narrowed.

      • Anonymous

        So if there were 4 methods of consumption, cd, vinyl, download and streaming, I think that would be a good thing. Part of the music industry heyday in the 70s and 80s was about selling music in multiple formats.

        • superduper

          Except that streaming is fundamentally different from CDs, vinyl & digital downloads because what CDs, vinyl & even digital downloads share in common is the fact that music is paid for. Streaming is nothing more than digital music rental. It’s a dirt cheap form of downloading with a few minor variations. In terms of sustainability, it’s good for short-term promotion, but bad for long-term consumption. I agree with you in that multiple musical formats are a good thing, but they cannot include formats such as streaming that completely counter to the fundamental means of doing business (i.e. selling music).

      • Anon

        Right, well I mean if you can keep a ‘stream’ off line then it’s not a stream, it’s a free song.

    • Linda

      Hummm I made $40 in Spotify streams last month alone I don’t know why people keep saying that. Artist like Taylor Swift can afford to blow off some income. But as an Indie I am quite pleased with my take

  4. Anonymous

    Music fans have also migrated to more specialized download sites (eg, Beatport) or to websites with higher quality digital files than the crap sold on iTunes or Amazon.

    • Vail, CO

      Yes, and no. Mainly, no. Sure, Beatport made sense for DJs, and SFX was dumb enough to buy them. But in the grand scheme, a sideshow.

  5. DavidB

    In the world of tech, anyone who forecasts more than 2 years ahead is foolhardy. Will there still be streaming services in 5 years time? Will Google still dominate the internet? We don’t know. Just to take the last point: Google’s dominance is based on its command of online advertising, but in a horribly crude, inefficient, and intrusive way. Anyone who can invent a better advertising mousetrap will eat Google’s lunch.

    • Anonymous

      Google’s dominance “was” based on search engine advertising. Now they have the worlds most popular web browser. The most popular mobile operating system (soon to be the most popular OS overall). The most popular video streaming service. The most popular map service. Google Fiber will give them millions of paying subscribers and the ability to deliver Google services directly. All these things secure their future in advertising and strengthening the Google ecosystem in general..

      This company isn’t going anywhere.

  6. Name2

    The two companies flogging the worst-sounding downloads are suffering a downturn, you say?

  7. Versus

    So it’s time to establish far higher pay-out rates for streaming.
    Which requires finally clamping down on piracy as well.

  8. Name2

    So, digital albums are steady, digital tracks are flatlining.

    Apparently, digital single buyers are not coming back to the iTunes/Amazon well for whatever reason. Piracy? A dissatisfying customer experience? They are casual listeners who lost their single purchases in a disk crash (no backups, remember: casual) and re-thought the value proposition when faced with buying everything again?

    Whereas album purchasers tend to the hoardy nerd/articiial shortage end of the music listening spectrum, and tend to their collections like gardeners do their orchids.

    Jesus, do we have to figure everything out for you people? Is it the coke?

  9. Dave Schaeffer

    Streaming for the kids who don’t care about the quality of the audio. CD or more likely DVD/FLAC/5.1 mixes for the audiophile fans who buy whatever the artist releases.

    Touring/Merch is already becoming the big $ maker whereas it used to be a loss leader to sell albums. Crazy world we live in.