2016 has just turned to 2017 and many people are reevaluating. One of the keys to this is throwing out ‘clutter’. For many, this takes the form of throwing out hundreds of CDs that have done nothing except gather dust for years. They were replaced almost a decade ago by MP3 downloads and since then streaming has become the preferred medium for a growing number of music listeners.
The growth of those using streaming services over the past 12 months has been huge, with revenue increasing by 57% in the first half of 2016 alone whilst revenue steeply declined for downloads (down 14%) and physical albums (down 17%). It has seen what was once viewed as an inevitable cause for stagnation and the possible destruction of the music industry by the internet as a lifeline. Warner Music, the third largest music label in the world, recorded revenues of $3.25 billion, its highest in 8 years, with $1 billion coming from streaming alone.
Today there are around 90 million people who use music subscription services across the world, but this number is steadily increasing and a huge market has developed. Apple Music had added 4 million subscribers between April and September and Spotify has averaged 2 million new subscribers every month across the majority of 2016.
The business side of this is huge too, streaming companies now have both paid subscribers who don’t hear adverts and make up a slightly smaller portion of total users, and free users who have limited access to services but have to listen to adverts. According to a report from GroupM, this represents a $220 million opportunity for advertisers. This is due to 60% of streaming activity taking place on mobile devices, where musical choices are more often linked to moods and emotions.
It is here that the real value in streaming comes, not only in terms of monetisation but in the huge potential it has to understand an audience.