Business Essentials for Professionals


Music streaming comes of age in the U.S.

It isn’t surprising to note that physical distribution channels are dipping while music streaming services are booming.

It was just a matter of time before streaming became the biggest cash cow of the American music industry.
As per RIAA’s latest sales report, of the total revenues earned by the American music industry in 2015, 34.3% can be attributed to streaming.  This barely edges past the figure of 34% downloads.
Physical sales, as expected, were down by 28.8%. Despite concerns of consumers opting to listen to free music will hurt the industry’s bottom lines, paid subscriptions were in fact the star of the report.
Ad-based music streaming pulled in 30.6% in revenues than its comparative previous year figure. Paid subscriptions jumped by 52.3%. Suddenly the idea that consumers will not be willing to fork out $10 a month for listening to music isn’t all that far-fetched.
New entrants to the industry, including Tidal and Apple Music, can be credited for the comparative rise in numbers. Simply put, last year streaming was clearly hot, and everyone new and old, including an incumbent like Spotify stood to gain.
Music videos and internet radio (SiriusXM and Pandora) also played their respective roles and contributed to the rise of figures, however it was less noteworthy.
Despite the drop in demand for hard copies, subscriptions from online streaming were enough to offset the drop in demand, with the entire industry growing by 0.9%.
Although it’s hard to say whether the streaming industry will be able to keep pace with this phenomenal growth since there are only so many people who are willing to put up with ads or shell out money. Even so, the data available in the RIAA report is enough to warrant labels changing their distribution strategy.
Instead of treating streaming as one of multiple options, perhaps they could steer consumers towards an on-demand service.

Debashish Mukherjee

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