Could Streaming Subscriptions Save The Music Business?
March 21, 2014 at 5:02 AM (PT)
Everyone is aware of the sales decline the music industry has suffered over the past two decades. But is there a light at the end of the tunnel? Yes, says THE ECONOMIST, which writes, "record bosses now hope that online streaming could become a big enough business to arrest their industry’s long decline."
The report notes, "streaming now has around 28 million paying subscribers, and several times as many who use free versions. Last year subscription-based versions like SPOTIFY had combined revenues of more than $1 billion, up more than 50% from 2012. That figure does not include online-radio firms, which last year had revenues of $590 million in AMERICA alone, a rise of 28% from the year before. In AMERICA, the largest music market, 21% of the industry’s 2013 revenues came from streaming, whose growth more than offset declines in CD sales."
"Streaming services have taken off thanks to wider smartphone adoption, faster internet connections (including 4G mobile) and the spread of cheap online 'cloud' storage for music files," sums up the article. "Even so, only 4-5% of music consumers in AMERICA and BRITAIN have so far signed up for subscription streaming, says MARK MULLIGAN of MIDiA CONSULTING. But if just 10% of the people in rich countries were to subscribe, the industry’s fortunes would be transformed, says CLAUDIO ASPESI of SANFORD C. BERNSTEIN, another research outfit."