According to the International Federation of the Phonographic Industry (IFPI), revenue earned via streaming services rose to an impressive 45.2% in the last 12 months, representing 43% of digital’s $6.7 million. With such a phenomenal rise, it is expected that streaming will soon supersede downloads to be the #1 digital revenue source – something that has already happened in 42 countries to this date.
On a global level, revenue earned from streaming has increased by 46.6%, 80.4%, 43.1% and 29.5% in North America, South America, Europe and Asia respectively.
Which begs the question: how did streaming music become popular and what are the factors that contributed to this?
Music streaming is preferred by the younger audience. A survey by ReportLinker has revealed that while 44% of the younger population prefers and uses streaming music services, 65% of the older generations avoid them, and have in fact said that they have no intention to make any use of them during the coming times.
Revenue earned from music streaming services has increased massively since 2010, going up to $2.89 billion paid by over 68 million paid subscribers as of 2015.
Meanwhile, ad-supported, free membership levels of streaming service have the widest user-base of 900 million, who collectively generate $634 million in advertisement revenue.
LOOP has revealed that while playlists have overtaken albums at 31% and 22% of listening time respectively, they are yet to overtake singles, which consume 46% of listening time.
Streaming music sites, which compile playlists using industry recommendations and computer algorithms have gained popularity since it is often used by members to look for music.
Yes, indeed, it is the tech-savvy portion of the population that is more inclined to streaming music, with 90% streaming on smartphones for an hour every day.
ReportLinker’s study has also revealed that streaming-music service-users are furthermore likely to be open to using different app and online services.
ReportLinker conducted a survey with the aim to finding out which service was most-used by music lovers. Here are the top services according to the study:
83% of respondents in the survey reported to have been satisfied with their choice of service, with 65% reporting that the basic factors behind selecting a service was the capacity for unlimited listening time and the regular addition of new selections.
As far as YouTube is concerned, it can be said that the its relationship with the music industry is more of a “love-hate” one, with many music-rights holders having complained that YouTube pays very little in terms of royalties. For the millennials, however, it stands as a top choice, accounting to 40% of listening time, despite contributing to a meager 4% revenue (Source: Digital Music News). In 2014, YouTube alone streamed 85.3 billion songs, as opposed to 78.6billion for others as told by an RIAA report. Revenue earned however was a completely different story, with YouTube’s being $147.5 million, as opposed to $946.4 million of other companies.
Founded in 2003, SoundCloud has 175 million members around the world with Europe contributing 40% revenue. However, it is yet to make any profit, having lost $43.9 million in 2014. The silver lining, however, is that with the company making 27.9 million this year, it may finally be able to turn a profit.
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