Is streaming taking over the global music industry?
The non-scientific answer to that question is ‘pretty much’. Though certain markets like Japan remain noteworthy exceptions. But Spain is following a trajectory well-worn by other major markets.
According to stats released this morning by Promusicae, streaming now accounts for nearly 75% of all recorded music revenues in the country. Unsurprisingly, streaming’s surge is quickly cannibalizing downloads, which plunged in the double-digits year-over-year.
Promusicae is Spain’s recorded music industry trade group, similar to the RIAA in the U.S. The organization represents an estimated 90% of the country’s recorded music industry.
According to the group’s data, streaming subscription income during the first half of 2018 surged 53% over the past year. Download sales plunged 23%.
The data displays a miraculous behavioral shift among Spanish consumers.
More Spaniards are putting down their credit cards, and many are ditching ad-supported tiers. According to Promusicae, ad-supported streaming pulled in 8.4 million euros ($9.76 million) in the first half of this year, a substantial drop from 21.8 million euros during in the first half of 2017. That’s a plunge of nearly 62 percent.
YouTube usage remains high, with comparatively smaller revenue contributions. Which of course isn’t unique to Spain.
That’s still mostly good news for Spain, which was a poster child for piracy-induced deterioration until recently. Starting in the early 2000s, illegal downloading took off like wildfire in Spain, effectively decimating the existing business.
But Spain’s heartwarming comeback may face another challenge ahead: stagnation. According to Promusicae’s stats, overall recorded music revenues only increased 0.36 percent to 107.6 million euros ($125.1 million). That perplexing math actually makes sense when broader download and CD declines are taken into account.
Moreover, a plunge in ad-supported income seriously tempered broader streaming gains.
That, unfortunately, could also be reflective of a broader global trend.
Physical isn’t growing, and its ‘drag factor’ could be larger than imagined. Just recently, Sony Music Entertainment warned of cooling revenues ahead, thanks to dipping physical formats. Amazingly, formats like CDs still produce billions, which means that billions will be lost as this format finally rides into the sunset.