Analyst: Streaming Services Generate Just 4% Of Global Revenue

Streaming's Long Road Ahead

Music streaming, touted by more than a few industry observers as the future main revenue source for the industry, maybe growing in popularity, but it has quite a ways to go before it meets those expectations. According to data crunched from an IFPA report, streaming currently accounts for just 4% of overall global revenues, reports DIGITAL MUSIC NEWS.

Industry analyst MARK MULLIGAN took IFPA findings that digital formats (primarily paid downloads and streaming) account for 34% of global recording revenues. Streaming accounts for 12% of digital's revenue, which means streaming accounts for about 4% of overall, global recording revenues.  

"It's not so much the fault of the SPOTIFY model, but streaming in many ways just isn't ready for mainstream," MULLIGAN told an audience at SXSW. "[SPOTIFY CEO] DANIEL EK [just revealed] six million subscribers, but six million subscribers compared to the 400 million credit card-linked accounts in iTUNES, it's just a drop in the ocean."

His conclusion: "However much you try to make that shape grow, you're not going to make it the majority digital [revenue contributor] in the next five years unless downloads collapse.  Now, downloads could collapse, I suppose, if APPLE did something really serious with streaming, but we know that downloads are increasing as well with all of APPLE's expansion.  Downloads are getting new customers as well."

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