• Josh Warriner

Music Streaming - Going Downstream?

Digital streaming makes up over 60% of the North American music business, and over 40% of modern music consumers get their music from almost exclusively streaming, but the operating costs seem to still overwhelmingly outweigh the profits.


The continued expansion of music streaming does not indicate stability. Below is a recent tweet by music author Ted Gioia:




Spotify appears to be paying out royalties on borrowed money, operating at a $4,000,000/day loss. Looking at these numbers with the number of consumers who rely solely on streaming, these may sound some alarms.


What happens when the money runs out? We're left to wonder. The two parties that will be most heavily affected are:


The Artist: Streaming platforms will be unable to pay out royalties, nor host music if they run out of money. The music, and money, will dry up. The artist will need to find alternative, and less convenient methods to distribute and market their music.


The Consumer: The most convenient source of music, and that which millions of people rely on solely will vanish. The consumer will be left to return to more traditional methods of music consumption.


There's no implication that the money is in fact drying up, however if the numbers that one of the largest streaming service in North America are operating at are any indication, we may be living in a bubble destined to burst.



Sources:

  • https://www.recode.net/2017/9/20/16339484/music-streaming-riaa-spotify-apple-music-youtube-2017-revenue-subscription

  • https://www.billboard.com/articles/business/8031468/nielsen-music-360-2017-report-streaming

  • https://twitter.com/tedgioia

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