Midway through 2015, streaming has become a divisive issue for the music industry. There are stand out success stories – such as Sweden where streaming grew the entire market – but this growth appears to be coming at a price. Music sales – physical and downloads – were down by 8% in 2014 and there is a growing body of evidence that suggests streaming is playing a contributory role. Furthermore, the total net subscriber growth actually slowed down in the US in 2014 according to the RIAA. Meanwhile, many industry executives are questionning the freemium business model that underpins services like Spotify and Deezer.
These factors explain why the global music industry is on the verge of the biggest shift in business models and behaviour since the rise of the CD in the 1980s. All stakeholders must identify transition streaming strategies that will see them through the interim period. They’ll have to take some facts into consideration:
– Radio’s reach is consistent: declining listening time aside, music radio listening penetration is strong across all markets;
– CDs still have strong appeal: nearly 15 years after sales started to decline it remains the most widely purchased music product across all markets;
– Access is replacing ownership: before streaming there was a clear division between discovery and consumption, Now streaming blurs the two.
Mark Mulligan is the founder of MIDiA Research and a music industry analyst, consultant and thought leader.
MIDiA Research is a digital content and music industry-focused syndicated research and anlysis service. It leverages proprietary consumer data, market forecasts and indices, to provide insight into the rapidly changing global digital content and music markets.