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Media (R)evolutions: Streaming into the future - Digital music increases its global share in the industry

Davinia Levy's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

How do you get your music? This is such a relevant question nowadays, since there are many ways to enjoy our favorite melodies: Do you buy physical copies (i.e., CDs - or vinyl for the essentialists amongst us)? Do you download your songs and singles? Or do you stream it directly from the internet? The music market is constantly evolving, and the way we consume music has a large impact in the industry’s revenues.  

Last month, the International Federation of the Phonographic Industry (IFPI) launched its Global Music Report 2016, which outlines the state of the recorded music market worldwide. According to their own news release: “The global music market achieved a key milestone in 2015 when digital became the primary revenue stream for recorded music, overtaking sales of physical formats for the first time.”

Mark Mulligan, a media and technology analyst, put together in his Music Industry Blog, the following graph analyzing the numbers from the Global Music Report.

According to the data, the following trends are observed:

  • Physical sales (of CDs) are down 4.5% from 2014
  • Download revenues are down 16%
  • Streaming revenue is up 31% - 78% of this revenue comes from paid streaming (which means monthly subscriptions for ad-free streaming in sites such as Pandora or Spotify).
In general, though, the total revenue of the global music market experienced a shy increase of 3% from 2014. According to Tim Ingham this is good news: this 3% increase represents the highest increase since 1998, and the first increase of any kind since 2012, when the market was up just 0.3%.

This data begs the question: what is the future of the music industry? The numbers show a clear trend towards more music streaming over physical sales. The music industry and streaming sites, particularly YouTube, need to find the right balance to make sure that right holders such as artists and record labels, get a fair share of that revenue.

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