Music News

A new turn for streaming this year? Threats, Closures and Acquisitions

Photograph of the blog post author, Mary Woodcock

Mary Woodcock

4.5.2016

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The evolution of music has unfolded at an exciting pace. From ‘The Phonograph’ to air radio, from cassette tapes to CDs, from the walkman to MP3 devices and now the industry revolution known as ‘Streaming’.

The advancement of digital technology has taken the consumer on a journey where it has empowered them to take music from a tangible experience to one they can literally travel with, which is awesome. In this new turn of events over the decades however, could Music Streaming Services be taking a new surprising turn? With threats, closures and a number of acquisitions against the streaming platform rising, has the music technology world been forced to come up with a new popular consumption tool that may overtake streaming?

 Although it’s hard to tell, Pandora takes the crown for the earliest and largest music streaming service. Launching back in 2005, its style and ease it was to access, (well that’s if you owned a computer) became one of the biggest music consumption methods in modern music.  When first created, the site provided a way of listening to good music selected by yourself of course,  without having to worry about stumbling across music you didn’t necessarily want to hear on mainstream radio or even on a CD you’ve bought. Following Pandora debut, other streaming services began to  place themselves on the modern music day map. These included companies like Anghami, Batanga Radio, Groove Music, Rhapsody and more recently, Apple Music, Amazon Prime Music, Deezer and Spotify. This is just a handful of what is out there now.

However, the fact that these platforms allow listeners to hear music from thousands of artists/bands without having to actually buy a single/album was no surprise that the foundation of these platforms have always been a bit controversial.  Battles have unfolded throughout the years with constant debates over the amount of royalties paid to artists and the reality of the high number of plays it’ll take through a streaming service before an artists or label actually makes any money. Undeniably the top music screaming services right now include: (with no particular order)

-Spotify

-Rdio

-Apple Music

-Amazon Prime

-Google Play

-Tidal &

-Pandora

Despite its rise, common threats over the years have involved the services  lack of profitability compared to other areas in the music industry. Business Insider released an article highlighting this through Deezers’ business platform stating they’d lost money since it’s launch.

However, Spotify grew 45% in revenue in 2014 solidifying their market share. This also includes increasing their premium subscribers which challenges the idea that it may be more of a business issue compared to a streaming one   Other common threats include whether consumers will continue to find the platform a valuable way in which they consume their music.  The services growth and success depends on the continuous high demand of music streaming platforms desired by the public, individuals who create it  the playlists and the partners who distribute it. If consumers continually show more interest in other music consumption platforms this could deter the growth in revenue, profitability, subscribers, and attaining licensing content from artists/labels and publishers. However in the first Q1 of this year the streaming sector contributed greatly to the music business, helping overall music consumption 83.4% compared to the Q1 in 2015. This meant they’d passed nine billion streams..woah.

On the other hand another threat even recognised by Amazons UK Head of Music Paul Firth, is how crowded the marketplace is. I don’t know about you but having hundreds of options can be empowering yet daunting. With this highly competitive industry  it’s easy for one to get swept under the rug if you don’t up your game in pricing, the quality and relevance of your content, reputation, unique features, accessibility and the overall user experience. With multiple streaming services offering the same thing, a crowded market place can be seen as major threat.

For example closures from ‘Last.Fm’ and Sony’s ‘Music Unlimited’ both saw closures in 2014 and 2015 with ‘Music Unlimited’ failing to remain competitive with industry leaders such as Beats Music and Spotify. Last.Fm saw a closure in their radio streaming service after choosing to focus more on it’s core product “Scrobbling”. If you’re as intrigued as I was it’s basically being able to send the name of the song to ‘Last.fm’ in order to build a music profile. Other contributors to potentially more closures could include failing to get licensing deals from major labels and surviving economic developments that may have a relative negative impact on consumer spending.  Lastly but not least failing to really grasp that user experience. Transparency and consistency is really important when it comes to streaming platforms. This in the long run will help minimise legal cases that are potential threats and acquisitions hurdlers.

For example, Kanye West and Tidal are being sued over Kanye’s  “The Life of Pablo” controversy after allegedly misleading people to subscribe to the service in hopes of exclusively listening to album (which gave the streaming service an additional 2 million subscribers). Only to find out it’s also been released on other platforms such as Apple Music and Spotify. Not to mention their brief mishap with users paying for West’ album to only find out it was nowhere near ready for release. Although now all behind us, can all of this really threaten the future of streaming services? Well yes and no. Streaming now averages around 750 million plays a week compared to 2015 where it stood at 410m. It’s overall market share against for example Universal Music stands at 37.3% of single streams compared to the company’s 36.1% single sales.  This figures clearly show that streaming is here for the long run and the only thing likely to threaten its existence is the lack of innovative ideas when it comes to this product. This is supported by Senior Director of Napster Ian Greaves who stated it’s a key part to having more subscribers and a decent future in streaming. However, the “no” leans to the risk it has in failing to up their game in their  approach in supporting artists and labels by paying them what they owe.

Nonetheless the streaming market is doing well, not only are existing marketing thriving despite  the changes of the music industry, new services are entering the market as well. With YouTube soon planning on making a debut with their premium streaming service, no matter what has been said about artists, the music industry and the listeners, there is exposure and long-term monetary value in the streaming business.  Check out our previous blog on why using streaming services as a promotional tool for your single is more effective than you think here. So buckle up, this could go in any direction, keep yourself informed, educated and aware. We may just be seeing something pop to take our music consumption brains for a new ride.


If you’d like to work with a producer/artist to get your single “streaming service” ready, why not create a project on the site. And sign up to Music Gateway

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