Roger Fingas
Streaming services like Spotify and Apple Music accounted for 47 percent of all recorded music revenue in 2018, making it likely they'll cross the 50 percent mark this year, according to official industry data.
Streaming income jumped 34 percent last year to $8.93 billion, pushing overall industry revenue up 9.7 percent to $19.1 billion, said the International Federation of the Phonographic Industry. The group specifically pointed to paid subscriptions, which claimed 32.9 percent of industry revenue.
The recording industry has been growing for four straight years, but in effect is actually recovering from a "decade-plus of decline," the IFPI noted. Labels and publishers were slow to adapt to the arrival of digital music, which resulted in piracy becoming commonplace even after the arrival of legal storefronts like iTunes and radio services like Pandora.
On-demand streaming may have finally cracked the value proposition needed to reach the masses. While buying a single album on iTunes typically costs at least $9.99, that same money grants access to tens of thousands of albums on Apple Music, if only for a month at a time. The convenience has apparently proven worth it for many people, even if some artists and labels are still holdouts, preferring to steer customers to shops like Bandcamp.
That option can make strong economic sense. Many artists have complained about earning poor revenues from on-demand services, and in fact pop superstar Taylor Swift initially refused to allow her music on Apple Music until Apple promised to pay musicians for streams during listeners' three-month trials. It's common for artists to depend on concerts and merchandise to actually sustain themselves.
Apple has since tried to position itself as more artist-friendly. Recently, for example, it declined to appeal royalty increases for songwriters.
AppleInsider Staff
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
26 Comments
It’s the way radio stations have worked, thought their payout per song is a lot more (though my cousin and others have said, over the years, that many smaller stations don’t pay).
the problem between the streaming companies and the music industry has always been the amount paid per song. The label doesn’t always get the biggest share. But the real problem is that we now know that ,people simply won’t pay more the]an $9.95 per month for music. There are other services, such as Tidal and QoBuz (which I subscribe to) that offer uncompressed streaming for more per month. But the equation is the same. Few people subscribe to these higher end services.
so the problem is that a streaming company can’t make money at $9.95 a month. Their payout of royalties and that of running the business is higher than that. It’s why Spotify and Pandora relied on a constantly renewing stream of outside investment to keep going. Most all streaming services over the years have gone out of business. A few have been bought out, and THEN gone out of business. Even Sony failed at this.
pandora is in a lot of financial trouble now. Spotify which went public last year, is having financial problems. I believe that, in the end, those left standing will be those that are owned by much larger companies who are using them to entice people to their ecosystems. Companies like Apple, Amazon, Google, Microsoft and possibly a very few others. They can offer this as a service, and not worry about being profitable as long as they feel they’re gaining more than they’re losing by having more customers overall.
so what does this mean to those who spend a lot of money producing this music? It means that they have to hope that they get so many streams, on average for their offerings, that the very small amount they get for one stream isn’t that important. This is working for digital books, where Amazon and others offer free books, and amazon offers a service for $9.95 a month (which I belong to) that allows you to read any book or series that’s available to it. Not all books, but a very large, and growing percentage. Authors say they prefer it even though they get very little per read, because people are more likely to read when it’s as thought it’s for free, and unlimited. It’s good because people will read all 10 books in a series when it doesn’t cost more than that $9.95 a month for that and everything else. Authors therefor get readers who wouldn’t otherwise buy all 10 books. Do that a few times a month, and you save big.
same idea with music. Is it working? Many artists are happy. Some are not. That’s nothing new.
Apple is on its way to monopoly. control over the music industry's profits. This is not a good thing for consumers, the music industry and music as an art form. Now our press is its next target. I know this is a fan boy website but there must be someone here besides me that sees history repeating itself (not Apple's history) and how if we are lucky our government will step in with an antitrust lawsuit. I've mentioned this before, if the feds had not brought suit against MS, this website, Apple, the iPhone would not be here today.
It still boggles my mind that people will pay $10/month for these services. I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)
All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.
Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.