Music industry heads towards recovery on streaming services like Spotify & Apple Music

Posted:
in iPod + iTunes + AppleTV edited September 2016
U.S. music sales grew 8.1 percent to $3.4 billion in the first half of 2016, largely on the back of streaming services like Pandora, Spotify, and Apple Music, according to industry data published on Tuesday.




Streaming revenues were up 57 percent to $1.6 billion during the period, representing almost half of all sales, the Recording Industry Association of America indicated in figures seen by Bloomberg. Subscriptions accounted for $1.01 billion, while ad-based on-demand streaming was up 24 percent to $195 million.

The U.S. record industry is currently on track to grow for a second straight year, which would be first time that's happened since 1999, when digital music piracy exploded.




The industry was slow to provide a convenient legal alternative, and the first major online stores -- including Apple's iTunes -- initially saddled files with DRM, complicating backups and limiting playback to certain apps and devices linked to a person's account. Labels were also accustomed to an album-based market, but discovered that many customers preferred buying cheaper individual songs.

Spotify is the current leader in on-demand streaming, with 40 million paid subscribers and an even larger number of people on its free ad-supported tier. Apple Music, which is paid-only, has some 17 million subscribers.

Most of Apple's streaming customers are new to paying for music, and not switching from Spotify, label executives told Bloomberg. That may make sense because Spotify is already platform-agnostic, and people using the service might be leery about losing their playlists, especially when both services offer similar music libraries except for small handfuls of exclusives.

Comments

  • Reply 1 of 14
    sog35 said:
    Music streaming needs to be cheaper to get wider adoption and grow revenues:

    $4.99 for one user
    $7.99 for 2 users
    $9.99 for 3 users
    $12.99 for 4 users

    The prices are way to high right now for mass market adoption.

    For the mass market playing more for streaming music versus Netflix is nutty.


    what total number of titles does Netflix get you?
    what total number of albums does streaming music get you?


    HD Netflix (really? a $7.99 SD tier?) is US$9.99 a month
    Apple Music is US$9.99 a month




    cali
  • Reply 2 of 14
    Meanwhile artist revenues are NOT on the road to recovery.
    jahbladeDeelronrepressthiscali[Deleted User]
  • Reply 3 of 14
    just like bluetooth hardware industry will grow...apple dictates the market and the others will follow 
    repressthiscali
  • Reply 4 of 14
    Meanwhile artist revenues are NOT on the road to recovery.
    Artists make their money from touring. 
  • Reply 5 of 14
    jdgazjdgaz Posts: 358member
    Apple attempted to help writers of books. The US govt saw to it that Amazon could mistreat writers all they wanted. Don't think Apple will try to help the music makers.
  • Reply 6 of 14
    The recovery is not for long. Once the industry starts increasing monthly fees across the board, people will come to realize they will have to pay more for still owning nothing.
    The streaming music model is broken - it is not like Netflix where you really watch once and never repeat.
  • Reply 7 of 14
    Meanwhile artist revenues are NOT on the road to recovery.
    Artists make their money from touring. 
    But songwriters don't make their money from touring, they make it from royalties. And most artists who are building a fan base make very little touring and sometimes lose money. Meanwhile, Starbucks continues to sell flavored water for $3-5 a cup, and most people seem fine with that. A couple cups of coffee costs as much as a month of Netflix. How ridiculous is that?
    edited September 2016 repressthiscali
  • Reply 8 of 14
    sog35 said:
    Music streaming needs to be cheaper to get wider adoption and grow revenues
    The prices are way to high right now for mass market adoption.
    For the mass market playing more for streaming music versus Netflix is nutty.


    I disagree. Let's say you pay $10/month for streaming music. You listen to music when you are working, driving, exercising at the gym, cleaning around the house, jogging, partying, etc., and on average you listen to music about an hour a day. So that's about 30 hours each month. At $10/month that's 33 cents per hour of listening. And if you listen to more than an average of one hour per day it's even less than that.

    When a cup of coffee costs $3-5, I don't think 33 cents for an hour of musical enjoyment is too expensive.  And the range of music available to you, including new releases, is of a much broader and comprehensive scope than what Netflix offers you in terms of movies and television shows. 
    edited September 2016 calisandor
  • Reply 9 of 14
    lkrupplkrupp Posts: 7,441member
    Meanwhile artist revenues are NOT on the road to recovery.
    Artists make their money from touring. 
    If that's true then why continue recording? Just tour and perform live if that's how they get their real income. Many bands got to the top through word of mouth at their concerts. Your assertion doesn;t make any sense.
    [Deleted User]
  • Reply 10 of 14
    calicali Posts: 3,495member
    I wonder how much of this increase is due to Apple Music?

    "Spotify being platform agnostic"

    Thought Apple Music was available for the iPhone knockoffs too?
    Or did they take it off the Play store? Lord I hope so.
  • Reply 11 of 14

    Most of Apple's streaming customers are new to paying for music, and not switching from Spotify, label executives told Bloomberg.


    I think this makes sense, since Apple Music is available in a wider number of countries. Users waiting to jump onto the streaming bandwagon would have jumped onto the first available service, which is now Apple Music in some countries.

    If Apple Music isn't eating into Spotify users, why is Spotify whining so much about Apple Music? From trying to get a dodgy app into the iOS App Store to claiming Apple is unfair, the way Spotify whines, you'd think Apple was taking away a million subscribers a month from Spotify.

    cali
  • Reply 12 of 14
    lkrupp said:
    Meanwhile artist revenues are NOT on the road to recovery.
    Artists make their money from touring. 
    If that's true then why continue recording? Just tour and perform live if that's how they get their real income. Many bands got to the top through word of mouth at their concerts. Your assertion doesn;t make any sense.
    Because the recordings bring people out to shows. What he says is not wrong. I majored in music industry, and we were all taught that you make your money through shows. Labels make their money off the recordings.
  • Reply 13 of 14
    I stop listening to the opinions of anyone who pooh-pooh's the idea of being able to listen to ANY song you care to hear for $10-$15 a month. I've paid for the privilege since Microsoft introduced the Zune Pass (when people laughed and made fun of the idea) and never looked back.
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