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Can Streaming Save The Music Industry?

Can Streaming Save The Music Industry?

Streaming v Downloads Chart

It really is very easy to say that music industry news agencies have internationally bombarded with statistics from various agencies claiming that ?music streaming is responsible for the 0.2% industry growth witnessed between 2011 and 2012, but how true is this statement? In one way or another, answering this question is not quite as easy as it may appear on the surface. Granted, on the whole, the regular use and popularity of these services has increased but digital music streaming doesn't quite bring in the same profit that paying for an individual track download would do. Obviously streaming is a way for record labels to groom seasoned pirates away from the illicit gains of a digital black market and back into a controlled medium, but still this doesn't mean as much as it should do. In an ideal world the record label should earn just as much by streaming or downloading but because there is a great misbalance the record label still has to account for a dramatic revenue loss (per digital stream) by tightening the cost of production. In fact, last year, US-based cellist Zoe Keating publicly announced her earnings from the 72,800 times her tracks were streamed on Spotify - she received a pitiful $281.87 (£179.70).

Although the above is actually quite shocking let us discuss this rather important graph we see to the left. You may not know this, but Sweden is a geographical location that was most torn apart by piracy so is it just by chance that 91% of it's total digital income originates from non and subscription streaming? Clearly not. Last year the Swedish music market witnessed a massive 13.8% growth last year which made the returned the same income as seen in 2005 - the year piracy begun to spread. If we compare Sweden to statistics from the rest of the world, the global mean percentage of digital income that is accounted for by music streaming is 13%; in Sweden it is a staggering 91%... that's a 700% increase on the global average. Being that Sweden was the home of the notorious 'The Pirate Bay', and had a reputation for one of the highest consumers of unauthorised downloads, this is a huge achievement. Managing director of Universal Music Sweden, Per Sudin, said to the BBC that "we were the worst in the class" and continuing to claim that "at international meetings, people looked at me like I was something the cat dragged in because I represented Sweden, where piracy had destroyed the market for everyone".  Finalising his notable comments Sudin said that he was "110% sure that this is the future. Streaming services will be the next step for global consumption".

I strongly believe that Sweden is a great model to use for the future of the music industry where trends in music streaming could suggest where we will be at in the future. Considering that streaming services have only been established for just over five years, it's success' are clearly visible from the Swedish, North Korean, Finish and Norwegian markets. However, where a more intense music industry resides, throughout centralised in Western Europe and the Americas, growth in digital streaming is obviously at a slower rate but it is climbing. In one way this is good because the music industry is regaining it's strength and ability to seek new artists for the future but their earnings will be significantly dented - long are the days where rockstars check in at hotels and trash their rooms... To pay off the damage they would need their tracks to be consumed half-a-million times to just pay for the damage. If you are Psy this may be okay, because you have over a billion views. All-in-all streaming has its good and bad factors and we all have to account for the change of popular music consumption - lets have a CD revival!

Edd Harris

It really is very easy to say that music industry news agencies have internationally bombarded with statistics from various agencies claiming that ?music streaming is responsible for the 0.2 percent industry growth witnessed between 2011 and 2012...

Edd Harris 17th April 2013

Article Ref: #CanStreamingSaveUs