Music streaming to hit revenue & growth highs over next five years
COVID-19 may have devastated the global music industry to such an extent the recovery period is expected to take up to two years.
However its impact and boost for music streaming has been clear to see.
Newly released figures forecast it will hit new highs in revenue and growth within five years, and continue to engine-drive the broader music industry forward.
The 2020 Streaming Forward report was collated by MIDiA Research for the US-based Digital Media Association (DiMA), whose six members are Apple, Amazon, Google, Pandora, Spotify and YouTube.
By 2026, it projects paid subscriptions in the US alone to be $11.6 billion, and the recorded music market at $20 billion – an all-time industry high.
“It is clear that streaming is on track to surpass terrestrial radio’s (US) audience and is outpacing the number of consumers who still physically purchase music for listening,” DiMA says.
To indicate the strong pre-COVID acceleration, the report reveals that by end of 2019, there were 99 million active streaming subscribers in the US alone (up 74.6% in two years), with revenues up 57% in two years to $10.3 billion, and with generation of 1 trillion music streams by then.
There were 117 million users of free ad-supported services.
Streaming continues to be a greater part of the biz’s revenue, now 77.4% from 72% in 2018.
“[The report] illustrates the enduring appeal of streaming to fans and its larger contributions to the music economy,” DiMA CEO Garrett Levin says.
“The connection between fan, artist, song and platform is powerful.
“At the same time, I firmly believe we must recognise these are uncertain times and we should approach the future with caution and humility, and an understanding that our collective futures are intertwined.”
“Streaming has transformed and energized the music industry and represents both the present and future of music; together we must find new ways to create, discover, and connect,” he adds.
“I cannot wait to see what the next transformations look like.”
Other data in 2020 Streaming Forward shows streaming generates $28.2 million a day, and accounts for 80% of the biz’s revenue
US households owned 71 million smart speakers in 2019, the highest penetration rate in the world, according to MiDIA , and a figure which quadrupled in just two years.
Levin reiterates how streaming has, and continues to, change consumer behaviour.
“Today’s music fan wants to listen to whatever music they want, wherever and whenever they want it.
“Thanks to the continuous innovations of streaming services, artists and songwriters can deliver that music directly to listeners whether it be in person, on the go, or wherever they are at that moment.”
In Q2 2020, 43% of smart speaker listeners exceeded six hours of music listening a week.
Most music is listened to in the car, twice as much as on home speakers, and on phones (58%).
Streaming subscribers listen more to music on their phones than free streamers (85% vs. 70%), watch more videos on YouTube (74% vs.69%) and listen to playlists (74% vs. 69%).
On the other hand, subscribers listen less to radio than users (65% to 75%) while 17% listen, to full albums compared to 20% of freemiumers.
Streaming gets artists to a global audience – Tones & I generated 7 billion streams on all streaming services for ‘Dance Monkey’ the report reveals – and music fans cast a wider net to non-English speaking acts in their discovery.
Mark Mulligan, managing director of MIDiA Research sums up, “When the dust finally settles on 2020, we will be looking at a music business that has been changed by COVID-19.
“Some of these changes will be in passing, but some, such as new behaviour patterns, will become long-term market attributes.
“Many of these shifts, such as more streaming at home, are in fact previously emerging trends that have been catalysed by stay-at-home measures.
“There will be many lockdown legacies, but one that is looking increasingly likely is that streaming’s role in the music industry will become both wider and deeper.”