Streaming music is slowly cannibalizing digital download sales

[Shawn Knight]

The music industry was flipped on its end more than a decade ago as the advent of digital music led to huge sales declines. Sales appeared to stabilize around 2011 and 2012 but then along came another disruptive force - streaming music.

Recent figures released by Billboard and Nielsen reveal a 4.6 percent decline in overall album and track sales during the first half of 2013. Broken down further, we find that sales of digital downloads dropped 2.3 percent while sales of physical CDs fell by 14 percent. The total number of mid-year streams, however, increased by 24 percent.

None of this is good news for the current top music retailer, Apple. But unlike the transition from CD to digital which saw a spike in music piracy (and a drop in sales), streaming music is still a viable revenue source for artists and record labels.

Services like Rhapsody, Spotify and Pandora all offer access to a huge catalog of music free of charge in exchange for ad placement or other restrictions. Alternately, most services offer a paid subscription model that will do away with restrictions and even allow for streaming via mobile devices. It may not be as lucrative as the old days of selling CDs and cassettes or the $0.99 downloads but it’s better than nothing.

Streaming appears to be the method of choice moving forward although Apple’s upcoming iTunes Radio will attempt to recharge the digital download industry while at the same time collecting revenue as a streaming provider.

Permalink to story.

https://www.techspot.com/news/53300-streaming-music-is-slowly-cannibalizing-digital-download-sales.html

 

[tipstir]

Audio Stream or not to stream. This what they wanted everyone to do now. Sirius XM service is not cheap I have that for 2 years now!

This will be the last year of that service. I use the ipod (got it for a gift) in my SUV is equipment for that device with the Media Center/Navi. Can also speak to the SUV and she can change the type of music I want.

Stream and add music seems easier. CD are cheap also today. Youtube has all sorts of Music Videos from Artist and also Amazon MP3, and the iTunes. Android way is different though.

 

[Experimentongod]

Slowly cannibalizing? I thought it already had killed them, interesting.

 

[negroplasty]

Funny, since I've subbed to a streaming music service I've spent 90% more money on music... I know a lot of people in the same boat. Greedy bastards in the music industry, honestly.

 

[windmill007]

People still buy a single song for over $1 when they can have 20 million for $9.99???

 

[windmill007]

They need to lower the per song cost to a more reasonable .10 to .20 per song. The time of ripping people off is over. That's why so many choose Spotify and similar services.

 

[Guest]

Agreed.

They just decided that a song was worth a dollar. We didn't agree to that price.

 

[Guest]

@windmill007: You don't own it, you only rent it. The difference is quite big.

 

[avoidz]

I've had streaming music for decades: radio.

 

[Jad Chaar]

No surprise. Spotify is just too OP (overpowered) lol.

 

[Guest]

I just download everything for free

 

[cliffordcooley]

I just download everything for free

You do realize that is what people say, when they pocket store items and walk out the door. Just because they can do it doesn't mean it can be justified. And when you download, that is exactly what you are doing.

 

[Guest]

They can have 20 million for $9.99
haha
200 million for freee

 

[treetops]

Next thing you know they will be using radio waves

 

[Skidmarksdeluxe]

I just download everything for free

You do realize that is what people say, when they pocket store items and walk out the door. Just because they can do it doesn't mean it can be justified. And when you download, that is exactly what you are doing.

Ignore it. They're just trolling. Do you think they'd have the guts to ID themselves?

 

[RmandsDC]

Personally, I've never liked digital music distribution, I prefer the real deal - CDs, it is complete, it is art. However, I use Spotify a lot, but it just seems too easy to listen to something, there's no longer the feeling of accomplishment, you never paid for it, so it is easier for the ears, music plays more in the background, as opposed to listening to it. If only I had the money to buy ALL of the CDs...

 

[RmandsDC]

They need to lower the per song cost to a more reasonable .10 to .20 per song. The time of ripping people off is over. That's why so many choose Spotify and similar services.

Well think about it from artist's perspective, they do all that musical work only to receive some pennys, therefore, the most of the dollar you pay for the song, goes to the label, so in my opinion, reducing the price of a song to 0.2$ would be just robbery, leaving artists bums. Well, it is not actually the record that makes all the money to artists, I am speaking more for the minor labels, that don't have contracts for millions, but artists at the major ones are probably more than fine.

 

[yukka]

I use spotify premium. I get it half price with a discount via national union of students in uk (NUS). Anyone waffling about downloading for free is better doesn't understand. With spotify you don't have to know about music in advance. You go to a friends with wireless, they like something and you instantly search and play it. You can use it on multiple devices, it carries playlists on your account. For a tenner a month it's worth the money (and for the fiver I pay it's definitely worth it). It's a complete audio solution for my iPhone, MacBook and windows PC at work and at home. Unbeatable. Edonkey and torrents don't cut it. It's just not worth the effort to copy files to multiple devices.

 

[Mister_K]

They need to lower the per song cost to a more reasonable .10 to .20 per song. The time of ripping people off is over. That's why so many choose Spotify and similar services.

Well think about it from artist's perspective, they do all that musical work only to receive some pennys, therefore, the most of the dollar you pay for the song, goes to the label, so in my opinion, reducing the price of a song to 0.2$ would be just robbery, leaving artists bums. Well, it is not actually the record that makes all the money to artists, I am speaking more for the minor labels, that don't have contracts for millions, but artists at the major ones are probably more than fine.

Most artists will make money not through their song sales but venues, festivals and events of that nature. Selling music digitaly is just the small part of it.

 

[wastedkill]

Oh how bad the artists have it like bruno mars earning $50million a year instead of $70million a year ohh noo they are turing into poor bums... come on people they are earning more than we do in a year stop complaining its not like they wont get by earning a few million a year.

If my salary dropped from $70million to $50million I wouldn't care a bit it just means I would have to save up a few weeks to get my new jet.

 

[soldier1969]

..And all this time I thought it was piracy hurting sales mmm. Oh well back to getting my music for free as usual...

 

[Guest]

Last time I checked Spotify they required a FaceBook ID so that is a no go for me. I use Pandora and di.fm mostly, but if I really wanted another streaming service I would probably just use Googles. I still buy CD's and rip thenm to wav. The wav files sit on a network connected PC that I can access via my main PC, my wifes laptop, the ipad, our phones, and the HTPC if I want to play them via the AV Receiver. That covers it for me. I am never away from my house and wish I had my music to listen to and if I really really really must have a specific song for some obscure reason when I am not at home I can just copy it over to my phone (once a year scenario) in less than a minute. I don't expect I will ever stop buying physical copies of music (CD/vinyl), but I also buy downloaded wav files as well.

 

[Guest]

"streaming music is still a viable revenue source for artists and record labels."

Where did the author of the article get that from? Here's just one example of what a ripoff streaming services are:

http://www.studio360.org/2013/jun/28/the_trouble_with_streaming_music/

" Lowery, the singer and songwriter from Camper Van Beethoven and Cracker, posted that article on The Trichordist along with his royalty statement for the 1993 hit “Low.” It works out to about four one-thousandths of a penny per play, divided between Lowery and his bandmates."

That's not a viable revenue source in any way. The amounts paid for streams are a pittance, maybe it's no big deal for stuff that's been out for ages and is just pure profit for whoever owns the rights, but any new stuff is going to make pocket change unless it's a massive hit song or album. Of course the artists still make money from concerts and merchandising, if they're popular enough, but this huge drop in revenue from sales to streaming will be a big hit for up and coming acts that don't have Metallica-level money in the bank. Many artists have been making obscene amounts of money over the years, however, so maybe it'll be like that South Park episode, where Lars Ulrich has to wait a couple extra weeks to put a shark tank bar beside his pool. lol.

 

[hitech0101]

Finally piracy is not a reason for decline of sales.

 

[cliffordcooley]

Finally piracy is not a reason for decline of sales.

This is "streaming vs digital downloads" not "piracy vs sales". Piracy is an issue that can be found in both streaming and digital downloads. The same colors can be seen on many different types of fruit. Just as piracy can be found in many different ways of receiving copyright material.

I'm willing to bet this decline in digital downloads is mostly paying consumers moving to streaming. Therefor the ratio between piracy and sales, has likely not changed.