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Music Streaming Skyrockets Industry Revenue

Music Streaming Services Black Background

Are streaming services the future of how we consume music? First, Google announces their streaming service, and now independent global music rights group Merlin have announced that 30% of European independent labels are generating more revenue from streaming services than downloads.


The announcement was made over the weekend of the 16th of May by Merlin Chief Executor Charles Caldas, at The Great Escape conference in Brighton. He also went on to announce that 90% of members saw a rise in revenue from streaming services between 2011 and 2012. He is quoted as saying; “We are in an exciting phase of the business. The new generation of digital services has created a new dynamic of consumer freedom, limitless choice and myriad paths to discovery. Our numbers illustrate that this dynamic is bringing incremental value to the market, and the demand from music fans for the music being released by our independent members is higher than ever before”.


In a previous news story on The Pro Audio Web Blog, about the launch of Google Play Music All Access, there was discussion about whether streaming sites actually benefit anyone. There were reports on Spotify losing money, and reports of artist’s record sales falling. However, this new information from Merlin may silence streaming sites critics. They have reported that not only are streaming sites acquiring an ever increasing percentage of online revenue, but that they are also not harming sales from downloads. In fact, Merlin has reported that “a la carte” download sales have increased for almost two thirds of the companies of surveyed.


Maybe now record labels will wake up to the fact that consumers simply expect to be able to try before they buy in the internet age. Just look at the success of this year’s biggest selling album, Daft Punk’s ‘Random Access Memories’. The hype surrounding the album arguably came from a leak and a free stream on itunes. One might assume that this may lead to people not buying the product, as it is available for free. However, it was still downloaded 221,000 times in its first week, showing that people will happily invest in a product that they truly enjoy.

So it sounds like streaming sites are confirmed for being the utopian future of the music industry, right? Well, in spite of Merlin’s glowing praise of music streaming sites, they warned of a “land grab” from major labels. Caldas claimed that streaming sites were catered specifically for larger companies. There have been reports that major labels receive 18% of Spotify shares, whereas Merlin receives just 1%. Considering independent labels represent 11 to 12% of Spotify plays, this seems rather unfair to the independent labels.


Beggars group Owner Martin Mills has previously reported that many labels now consider streaming sites more important radio than radio play; perhaps a sign of the change in the music industry. Whether you embrace them or remain cynical about them, it appears it’s going to be impossible to ignore streaming sites in the future.


Sean Lewis

Are streaming services the future of how we consume music? First, Google announces their streaming service, and now independent global music rights group Merlin have announced that 30 of European independent labels are generating more revenue from...

Sean Lewis - 30th May 2013

Article Ref: #MusicStreamingSkyrockets