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!
Only three more months remain in 2016. As the world of music becomes increasingly more virtual and digital, change has become inevitable. What does the future hold in store for the remainder of the year and beyond? Let’s look at the numbers and find out.
$5: The new paid music tier Pandora will be introducing as early as this month. Most streaming services offer a free and a $10 tier. Why the change? The media giant is responding to customer complaints that the $10 tier, $120 annually, is too high. In fact, it’s more than the average person pays annually for music, according to market research firm MusicWatch. According to the firm, the average listener will pay $67 in 2016. Even at its peak in 1999, the average was $80. Amazon also is expected to create a less expensive tier before the end of the year. Currently, Amazon Prime subscribers have access to music with their $99 annual subscription. Amazon is expected to unveil a $10 monthly subscription for those who want music without the other Prime services. Source: The New York Times
2017: The year Spotify is expected to launch its initial public offering. As the streaming music service prepares for its IPO, its licenses with Universal Music Group and Warner Music Group need renewed. Both licenses expired in 2015 and music has been offered on a month-by-month basis. According to major-label sources, Spotify wants to pay less than 50% of its revenue to labels. Currently, it pays 55%. Spotify also is seeking to keep its free tier. A license with Sony Music Entertainment also needs renewed. Spotify is preparing for an IPO because in March it raised $1 billion in convertible debt. The company was valued at $8 billion in 2015. Source: Billboard
17 million: The number of Apple Music subscribers since it came into existence a year ago. During the same timeframe, Apple sold a quarter of a billion iPhones. In the early 2000s with iPods and the iTunes store, Apple held a competitive advantage. With streaming music, however, it is just one of many services. Apple Music come free for three months on all new iPhones. Apple must work to turn these iPhone users into paid subscribers. Otherwise, they will use competitors like YouTube and Spotify. Source: Eric Garland
80%: The percentages of business ventures that fail. This begs the question: Why do musicians feel they are entitled to make a living off their music instead of viewing their career like an entrepreneurial endeavor? In the Netherlands, 31% of single and 19% of married Dutch musicians make a living off music, according to a report from a labor union and a Dutch rights organization. Government incentives, industry collaborations and technology could help make the percentage of musicians who make a living on their life’s passion up to 35%. Source: Medium
60%: The percentage Universal’s streaming music revenue grew in August, according to Billboard. Warner and Sony also grew, both at 42%. Does this growth successfully offset losses from physical sales and downloads? Not necessarily. Many artists have opted to release albums via executive deals. In addition, genre matters. Together R&B and hip-hop make up 30% of the streaming market. The success of streaming services has encouraged these websites to invest in new content and this could led to a fundamental change. For nearly a century, the recording industry and the music industry have been one in the same. Soon, the music industry will be come synonymous with streaming services instead. Source: Synchblog
Explore key themes such as streaming at Midem 2017 with our brand new advisory board; more info here
Top photo: © Getty Images / alengo