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In this series of posts from Reportlinker, we review the latest music+tech news, with one big statistic per news item. All you need to know, in figures!

Say it’s not so.  Is the digital music industry dying?  That’s exactly what some music industry experts are saying, but is there really cause of concern?  Let’s take a look at the numbers.

  1. 24.2%: The amount sales of single downloads have dropped in the U.S. during the first half of 2016, according to market researchers BuzzAngle.  In the first six months of 2015, 541.2 million songs were sold.  This year, that number feel to 410.5 million.  This is an estimated revenue loss of $100 million.  Sales of full albums also fell, falling 17.7% from 2015 to 45.9 million sales.  Meanwhile, though, sales of on-demand audio streams grew 108% to 114.2 billion.  Music streams also grew, increasing 23% to 95 billion.  Source:  Music Business Worldwide
  1. 2020: The year analyst Mark Mulligan at Midia believes the Apples iTunes store will need to be closed because of declining sales.  That year, Mulligan says, revenue from downloads will be 10 times smaller than the revenue for streaming music.  Download sales reached their peak in 2012, but have fallen 42% since.  If download sales continue at the current pace, they will only reach 277 million downloads by the end of the first half of 2017.  As for digital album sales, they are in trouble, too, if sales continue at the current pace.  If they do, they’ll disappear entirely by 2021.  Source:  Music Business Worldwide
  1. 61%: The percentage of Spotify users who are under the age of 29.  Spotify isn’t alone.  Streaming services are largely populated by Millennial and Generation Z users.  Courted older users could be profitable for streaming sites.  A study by Jackdaw Research found that those older than 35 still purchase physical albums because they own the equipment necessary to play them.  They have deeper pocketbooks and convert to paid users of streaming music sites at a higher rate than their younger counterparts.  AppleMusic, for example, earns most of its paid subscription revenue, 67%, from the older demographic.  Streaming services can attract older listeners by offering content that interests them as well as optimized radio services.  Source:  HypeBot
  1. $200 million: How much Spotify lost in revenue in 2015.  It needed to raise $1 billion in debt financing to prevent going out of business.  Why?  The majority of streaming music sites’ revenue, more than 85% for Spotify, goes toward licensing costs.  Last year, Rdio went bankrupt, and Pandora appears to be heading in that direction.  Tidal, which only debuted in 2015, is seeking a buyer, and Rhapsody has had years of losses.  Streaming music services have found it nearly impossible to turn a profit.  The solution:  become part of a larger company or renegotiate licensing fees.  Source:  Fortune
  1. 4 million: The number of Tidal subscribers in May 2016, up from 500,000 in 2015.  Tidal has been able to build its base by offering exclusive releases.  It also has branded itself as a premium service. Source:  Midia Research

 

Top photo: © Shutterstock / Gil C


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About Author

Melina Druga

Melina Druga is an author and freelance journalist. You can follow her on Twitter @MelinaDruga.

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