Streaming – a New Source of Revenue in the Music Industry

A lot has changed in the past decades in the music industry. It seems that just several years ago, people were standing in lines to buy new records, cassettes, and CDs of their favorite musicians and bands. The technology gradually improved, and you could download your favorite song instead of buying a CD. However, as technology improved some more, streaming became the easiest and the most popular way to listen to your favorite songs.

Nowadays, streaming represents a major source of revenue in the music industry and the most popular way to listen to music. According to a recent study, streaming is responsible for as much as 75% of the music industry income. For that reason, we will try to explain what streaming is, and how it brings profit.

What is it?

Streaming music is a way to listen to music without downloading it from the Internet. In order to stream music, you need a good internet connection, some speakers and the necessary software. Of course, streaming is not only available for computer devices. You can listen to music on your mobile device as well. Streaming has become extremely popular, and there are many music services such as Spotify, Pandora and Apple Music which use this way to deliver music.

How does streaming increase profit?

Needless to say, if you want to use streaming, you should subscribe to a music service which offers it. There are many paid programs, such as Apple Music, Amazon Music and others which offer around 40 million songs. Some of these programs offer free trials and after the trial period, you need to pay for the service in order to continue enjoying listening to music. This is how streaming earns money. Customers pay the fee and enjoy the music. This is highly beneficial for the customers since they do not have to buy CDs, wait in lines, and download the music they love.

Because streaming music is much easier and more available than buying a CD or downloading a song, it naturally became extremely popular. When we compare the profit of physical sales and downloading to streaming, we can see that physical sale and download together earn as much as streaming on its own. In the U.S.A. streaming is responsible for 75% of the profit. In other countries, the situation is similar as well. For example, in 2016, in the U.S.A. streaming earned 2.48 billion dollars through subscriptions and 1.45 billion dollars on other types of streaming, while physical sales earned only 1.67 billion, and downloads earned 1.84 billion dollars. The numbers show how important streaming is for the music industry which is why its popularity keeps growing.