Spotify still records losses – even though it is expected to seek a flotation this year. Pandora, the market-listed US streaming service, hasn’t made an annual profit since it floated in 2011. There’s another difficulty: streaming services tend to lose money. In the US, Nielsen SoundScan has confirmed the same pattern, with paid song downloads down 12% in 2014, from 1.26bn to 1.1bn, while song streaming rocketed from 106bn to 164bn.
#Future never end free music download download#
The figures suggest streaming is eating into digital downloads rather than CD sales: its revenue growth is almost exactly matched by a fall in digital download revenues, now at their lowest level since 2011. “Unfortunately there was pitifully little progress in 2014, with label fears of cannibalising 9.99” – the price of a standard album, in dollars or euros, on iTunes – “dominating thoughts”. “I’ve been banging the pricing drum for so long the stick has broken,” he said recently.
Cutting subscription prices would entice many more to pay, he thinks, easily making up for lost revenues. Even before the digital revolution, the average person spent less than £5 a month on music, with most spending accounted for by a small number of big buyers. Mulligan thinks the problem is the price. Mark Mulligan of Midia Consulting who has a long track record watching the music business, reckons there are only about 35 million paying subscribers worldwide for all streaming services, out of more than a billion potential users. The US-only Pandora claims 250 million users, but only 3.3 million paying its $5 a month subscription. Another service, Deezer, claims to be in 182 countries, giving it about as many potential users (and payers) as Spotify in mid-2013 it reported 16 million monthly active users, and 5 million subscribers. So only 1% of potential subscribers actually pay. Spotify, for example, is available to nearly 1.1 billion internet users around the world, yet it can claim only 12.5 million paying users and 50m ad-supported accounts. If they are the new radio, well, who pays to listen to the radio? And unlike radio, advertising cannot cover the cost of the service. (The ERA reported streaming revenues of £175m, but typically its values show a 40% retail markup over the BPI’s wholesale figures.) The problem with streaming services, though, is that they seem remarkably ineffective at persuading people to hand over their money. Data released by the Entertainment Retailers Association and BPI this week suggested wholesale streaming revenues were £125m for 2014. Yet streaming revenues are rising fast, according to the BPI’s figures: they have zoomed from zero in 2007 to £76.7m in 2013. It’s my opinion that music should not be free.”Įd Sheeran, Beyoncé and Coldplay have used similar tactics, offering CDs and digital downloads for sale before putting them on streaming services – the opposite of the way radio has been used for promotion for decades. Sometimes it seems as if everyone is planning a music streaming service, just as a decade ago everyone down to HMV and Walmart offered music downloads.īut unlike downloads, musicians do not universally love streaming.Īt the start of November, Taylor Swift removed her new album and back catalogue from Spotify and the other streaming services, having complained in a Wall Street Journal column in July: “Valuable things should be paid for.
A partnership with the music video service Vevo could be incorporated into future versions – which surely helped the Silicon Valley darling raise another $485m, valuing it at more than $10bn, in the past few weeks. Snapchat, best known for its self-destructing photos and videos that are a hit with teenagers, is also planning a music feature, according to emails leaked as part of the hack of Sony Pictures. This year Apple is expected to muscle in on the scene using the Beats brand it bought for $3bn (£2bn) in May 2014, as is Google’s YouTube, which last November launched a paid-for, ad-free music and video streaming service, YouTube Music Key. Listeners can range over millions of tracks – the “universal jukebox”, create and share playlists socially, discover new artists effortlessly through “artist radio”, and listen anywhere (even downloading temporarily for times when their smartphone gets no signal).
If you wonder what the person next to you on the bus or train wearing headphones and looking at their mobile screen is listening to, it is probably the new radio – a streaming service.Īccording to the music business body the British Phonographic Industry (BPI), Britons streamed 14.8bn tracks last year, almost double the 7.5bn of 2013, as internet connectivity improves and becomes pervasive.Ĭompared to buying music downloads, streaming services have a number of advantages.