Streaming number 1 way of consuming music, streaming services threatened?
Streaming overtook song downloads in the U.S. for the first time in 2016, according to a year-end Nielson report, Matthew Strauss reported for Pitchfork. “Overall on-demand audio streams surpassed 251 [bn] in 2016 — a 76 percent increase that accounts for 38 percent of the entire music consumption market.” 2016 saw an average of 1.2 bn streams per day compared with 734 mn song downloads for the entire year. The finding is further supported by the fact that music streaming subscribers who pay monthly reached 100 mn, according to Shira Ovide and Leila Abboud who write for Bloomberg’s Gadfly.
“Although revenue is finally growing again for the big record labels, the music streaming industry is on the verge of a shakeout that could eliminate smaller players like SoundCloud.” Revenue from streaming resulted in the first significant gain for the music industry in the U.S. since 2000, with an 8% increase in revenue in the 1H16. Streaming services account for 47% of the U.S. music industry revenues. However, independent streaming services like Germany’s SoundCloud and Sweden’s Spotify remain unprofitable because of the amount of money they pay record labels. Spotify is expected to IPO this year. And Google is said to be interested in acquiring SoundCloud for USD 500 mn, writes Tim Ingham for Music Business Worldwide, who previously reported Pandora might be sold to SiriusXM. “If SoundCloud does sell to Google, it could be the beginning of a major shake-up in music streaming land in 2017.”