The streaming space is expanding exponentially - research findings show how streaming is contributing to declining download sales. Labels, artists and music services should make no mistake that we are all on the cusp of a new era for the music industry. It won’t be an easy excursion and many will approach obstacles before they hit smooth sailing. Thus, we share the results of UK based MIDiA Research and IFPI - major insights that require a caffeine-fuelled concentration.
- The total number of global music subscribers is estimated around 32 million.
- The number of paying subscribers rose to 28 million in 2013, up 40 % on 2012 and up from only 8 million in 2010.
- Revenues from music subscription services grew by 51.3% in 2013 and exceeding $1 billion.
- Revenues from advertising-supported streaming services, such as YouTube and VEVO, are also growing — up 17.6 % in 2013.
- VEVO has performed strongly, hitting 5.5 billion monthly views in December 2013, a 46% year-on-year increase, and attracting 243 million unique viewers worldwide.
- The world music market is highly diverse, with markets growing at different speeds and favouring different consumption models. Digital revenues in the US, the world’s largest digital market, grew by 3.4 % in 2013. When in Europe - by remarkable 13.3%.
- Scandinavian countries Denmark, Norway and Sweden are a showcase of music industry revival. Streaming revenues accounted for 63% of music sales in Denmark during the first half of 2014.
- The Netherlands has seen a similar trend, one of the first markets outside Scandinavia to do so.
- On the other side of the globe, Taiwanese KKBOX received an investment of $104 million from Singapore sovereign wealth fund. KKBOX is a major Asian player in the music streaming industry affiliated with more than 500 international major and independent music labels. It is available in Singapore, Taiwan, Hong Kong, Japan, Malaysia and Thailand with over 10 million users.
- The digital download model remains a key revenue stream, however, with a substantial 67% of digital revenue.
- Though according to findings released by MIDiA Research, music downloads will drop 39% over the next five years. When streaming and subscriptions will grow by 238% on 2013 levels to reach $8 billion in 2019 and represent 70% of all digital revenue.
Artists and music management start to recognise both financial and creative benefits of streaming.
Here is an industry perspective from Carl Vernersson, At Night Management, who is representing the international best-selling Swedish DJ Avicii. “From a financial perspective, streaming gives songs a longer life and sustainability, meaning that you receive income over a long time. It may not be as much as when you get something peaking on a download service in the first three or four weeks. But with streaming, it generates income for ten, fifteen or twenty years, and that is royalties, not just publishing income.”
“Looking outside Sweden, I think that once services like Spotify are established for a couple of years it will show artists that streaming is a sustainable income, not a six-month-per-album income.”
A second benefit Vernersson points to is creative: “With the streaming revenue model, it’s even more important to deliver a solid album and not just a bundle or a single. That is something that I like about streaming from a creative perspective. People aren’t forced to go for a bundle-only download to get a single. They can make their own playlist and explore music in a way that wasn’t possible before — even though the concept of playlists has existed for a very long time.”
The power of the Internet and the hunger of the consumer are changing forever how one another interact with music. Streaming is the future and the future is now.