Streaming services a major boost to music industry in 2017
Streaming services are rescuing the music industry’s revenue.
For a long time now, the music industry has been going through puberty of the technological age, having to adapt to the internet, downloads, and the fact that people don’t buy physical copies of music.
But now the industry is breaking free and increasing revenue with the help of streaming companies and the paid services they offer.
In 2017, global revenues hit $17.4bn in trade values, up from 2016’s $16bn total.
According to research from Midia, the current global total sits just below 2008 levels of $17.7bn.
Streaming was the main driver of the growth, boosting revenue by 39% year on year, representing 43% of all revenues (nearly half of total revenue), despite the decline of legacy format sales (CDs, vinyl, downloads.)
As for music label stakes; Universal Music Group is at the top with 29.7% total revenue, with Sony Music 2nd and Warner Music Group coming in third place.
Music revenue stream
Interestingly, the fastest growing segment was not streaming, but independent artists not signed to a particular label. The segment is flourishing because of platforms like Bandcamp and CD Baby, which allows artists distribute their music directly to fans.
Companies like these generated $472m in revenue, an increase from $317m obtained in the previous year.
Should labels be scared? Midia doesn’t think so: “Although this does not mean that the labels are about to be usurped, it does signify – especially when major distributed independent label revenue and label services deals are considered – an increasingly diversified market.
“Add the possibility of streaming services signing artists themselves and doing direct deals with independent labels, and the picture becomes even more interesting.”
Spotify and Apple Music are still vying for that top spot in the stream, and although Spotify still has more premium users, Apple Music is growing at a faster rate in the US- 5%/month compared to Spotify’s 2%.
Either way, streaming services are keeping the music industry afloat.