Where Next For Streaming?


The Gen asks five big questions of the music industry in 2017 this week, revealing one a day here.

Question 1: Streaming services reached a turning point in 2016- where do they go from here? 

The numbers are in and, as ever, strive to tell a good story- According to the Entertainment Retailers Association (ERA), the amount of money spent on music streaming services in the UK last year grew by £165m. Spotify, Apple Music and the others generated £418.5m in the UK with subscription streaming revenues growing by just over 65%.

This was despite a dramatic 26.8% year-on-year drop in revenue from download services such as iTunes and an unsurprising decline of 7.3% in physical music revenues despite physical still slightly dominating the market, one suspects for a final year.

The UK record industry overall generated £1.11bn ($1.37bn) at retail in 2016, up 4.6% year-on-year. Spotify revealed in September 2016 that paying subscribers has surpassed 40m, with Apple Music accelerating to 20m less than 18 months after launch.

To quote Taylor Swift (who of course you can only hear on Apple Music): “Are we out of the woods?”

Not quite, though its certainly good news for major labels that have both, the back catalogues and reported shares in some streaming platforms to take advantage of the boon.

We’ve also seen the return of commercial juggernaut Ed Sheeran this week, with two new tracks sitting pretty at both one and two on Spotify’s official global chart, clocking up a staggering 419,856,23 plays between them at the time of writing since Monday morning. Not bad.

As an aside, has streaming and the immediacy of such metrics made the official charts more or less redundant? There are also developing connections between live tickets and streaming, not least Spotify’s integration with Ticketmaster that are set to shake up the marketplace even further.

This is clearly a critical year in streaming’s development, with such platforms set to become the biggest source of money for the industry, offsetting the decline of more traditional formats. The move towards increasingly more personalised, curated services was a welcome one in 2016- you can’t pirate such services and provided that exclusives don’t scupper the whole model, most subscribers probably aren’t headed back to the pirate bay anytime soon.

Yet issues remain- Not least the confusing plethora of services essentially offering the same thing, the famously low pay outs for artists, especially at the lower end of the scale and a price point of £9.99 a month that remains uncomfortable for the public at large- These are problems that must be resolved in order for music streaming to hit Netflix like levels and be the premier platform for music consumption in 2017.

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