Shift to Streaming

In class we started the documentary Downloaded, and I wanted to look further into music streaming and how it's used today.  We learned that the sales of vinyls and discs decreased greatly with the creation of Napster.  Napster allowed individuals to download and share music with other individuals on the site.  Since then, other forms of getting music have taken over, including streaming.  

 Streaming is now the way the majority of people in the US obtain their music.  Many platforms have been made for music streaming such as Spotify, Apple Music and Soundcloud.  Being quick, easy and affordable, consumers are turning to these sites for their listening pleasure.  One way these platforms get money is buy using subscription services.  According to the New York Times, " streaming now makes up 34.3 percent of sales, edging out digital downloads as the industry’s biggest source of revenue."  In 2015, " paid subscription services generated $1.2 billion in sales in the United States. After adding in free streaming platforms and Internet radio, the total for streaming is $2.4 billion."  
This graph shows the revenue from physical sources(vinyls/discs) to digital sources (iTunes/Spotify)

Some see this shift as negative and feel it could cause issues within the music industry.  There's concern with the profits associated with streaming music.  "In a rough analysis of the recording industry association’s numbers, Billboard magazine estimated that the average amount of money generated each time a song is streamed fell last year by about 24 percent, to 0.506 cent."  It seems that the money is vanishing and other platforms aren't doing well either.  In 2006, "record labels still reaped $9.4 billion from CD sales in the United States, more than the total sales revenue of the business today. Last year, CD sales stood at just $1.5 billion, a drop of 84 percent in a decade."  

With a world revolving more and more around technology, it makes sense that streaming has become so popular.  What comes next?  Will there be a new "Napster" that takes over music sales?  It will be interesting to find out.  



Sources:
https://www.nytimes.com/2016/03/25/business/media/music-sales-remain-steady-but-lucrative-cd-sales-decline.html
https://www.weforum.org/agenda/2018/10/visualizing-40-years-of-music-industry-sales/

Comments

  1. AnonymousFebruary 25, 2019 at 4:12 PM

    I found it quite interesting how music streaming has become the new norm for music listeners, but I also felt that the current format serves as a pretty strong business model, with ads on free streaming and options to pay to remove ads. I looked more into the profits that companies make from streaming, and I found that although streaming is on the rise, profits do not seem to be low for big music labels, with three big labels making a combined $800,000 per hour from music streaming services. I think it's interesting how the music industry continues to profit heavily despite the modern shifts to digital media, and I am interested to see how the profits for the labels could potentially change as streaming continues to become a larger percent of revenue for the companies.

    Source:
    https://mashable.com/article/major-music-labels-19-million-per-day-streaming/

    ReplyDelete

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