The music streaming industry takes a lot of hits from critics, claiming they pay artists sparse royalties and that they have cost the Industry billions. But if you take a look back at where the music industry was heading in the turn of the 21st century, these claims are harsh if not completely untrue.
For those of us who can’t remember the early 2000s and late 1990s, the music industry was in decline, losing billions of dollars for a full decade before the introduction of music streaming. The rise of Napster and other services, gave free rein for piracy and illegal music downloads, and because of this the music industries revenue has declined every year between 1999 and 2014.
After nearly 15 years of decline music streaming seems to be the only thing keeping this sinking ship afloat.
Back in February Spotify CEO Daniel Ek went as far as saying that music streaming has single-handedily pulled the music industry out of this decline.
“Now, finally, after years and years of decline, music is growing again, streaming is behind the growth in music, and Spotify is behind the growth in streaming.”
Today, the #1 way music is consumed, is by streaming, and is the biggest money-making sector in the American music industry.
All the big streaming companies – Spotify, Apple, Pandora and Amazon – are all investing in new ways to create more money and consumer awareness. With more of these companies looking to entice users in to paid subscriptions, and also Amazon set to release an entirely new paid for subscription service.
Streaming companies marketing efforts seemed to have worked, with paid subscriptions topping over $1 billion in 2015. With the whole streaming sector being worth $2.4 billion.
Spotify has just raised $1 billion, with clients of Goldman Sachs, Dragoneer Investment Group and private-equity firm TPG being part of the deal. The music streaming company is currently the largest paid streaming service, with 30 million paid subscribers – this has increased from 20 million in 2015 and 10 million in 2014. Spotify’s largest rivals are Apple Music with 11 million paying subscribers. But this could change with the addition of Amazon’s new paid service.
Investment into music technology has also grown, with nearly $2 billion being invested in 2015, more than double of the $947 million the previous year.
Acquisition and consolidation is also ripe, with companies buying out others within the music technology industry. With Apple buying Beats for $3 billion, Pandora who bought Ticketfly for $450 million and many more examples.
Money is being invested heavily into music tech, with industry data pointing to an explosive growth in the next few years, this seems to be the smart choice with these investments being set up for remarkable returns.
The greatest thing about the streaming industry is not necessarily the increase in money, but the why it has expanded and changed the music industry overall.
The streaming industry doesn’t look like it’s going to stop growing anytime soon, music manager and expert in the industry, Troy Carter, believes this, and has stated that the streaming market will grow massively over the next five years, from 100 million users to 1 billion.
Find What You Like believes in music streaming by allowing you to link your Spotify, Deezer, Soundcloud, and Youtube accounts. Join the Find What You Like community for FREE to search, create and listen to your favourite music together with your streaming provider of choice.