Find tour dates and live music events for all your favorite bands and artists in your city! Get concert tickets, news and more!

  • Analytics
  • Tour Dates

The Streaming Effect: The Landscape May Be Gloomier Than Pictured

(Hypebot) – "The Streaming Effect: Assessing The Impact Of Streaming Music Behaviour" is a new report from MIDiA Research focused on the music market's reaction to streaming music options and the effects of listeners' choices on music sales. Listeners have an array of easy free choices, described in the report as a "hierarchy of free," from which to choose. So, though there may be many more listeners left to make the transition to streaming, that transition continues to be difficult. In fact, it may well be that free ad-supported options rule the day establishing a much lower and more turbulent source of core revenue for recorded music.

MIDiA Research's Mark Mulligan and Alun Simpson coauthored "The Streaming Effect: Assessing The Impact Of Streaming Music Behaviour." They provided Hypebot with a copy to use for this post.

They address key findings in a blog post and note that the "shape of the digital music landscape is changing, but the nature of its impact on the broader music market is not straight forward."

They emphasize that "streaming consumers are buying fewer albums" but that there is "potential for more growth" though there are threats to revenue growth.

The general tone of the blog post and the report itself is one of hopeful pragmatism. The landscape has changed but now we have a sense of where we stand. There will be losses ahead but we can anticipate where that's going.

"Free streaming is where the heat is but not the revenue." [p. 6]

But the larger report touches on my biggest concern about where all this is going with more discussion of free and ad-supported options for streamers. As they note in the report, ad-supported free alternatives to piracy make a lot less per user than do subscription services. And "free streaming is where the heat is."

They also point out that emerging markets could actually grow paid downloads given that they face spotty mobile streaming options. But as we've seen with Yala Music and, free ad-supported downloads may be a better fit.

Note that ad-supported piracy is also competing for advertising.

Keep in mind that music downloads are also being used for marketing and customer loyalty by a growing range of big brands.

In fact, it looks like the future of digital music could arguably be more about ad-supported and branded content than paid subscriptions. And the winner of that game may well be YouTube.

As Mulligan and Simpson put it [p. 10]:

"The stand out issue is what degree of the remaining 71% of streaming music consumers are likely to become paid users. Free versions of products will always out perform paid ones, that is an inherent part of the model. The challenge arises when the free alternatives offer so much value there is not enough reason for many of the key premium targets to start paying for the premium offerings. Such is the case with streaming music."

"While Spotify et al are clearly compelling propositions, YouTube is an even more compelling one, with an unsurpassed catalogue, video, lyrics, social and countless other benefits, for free on every smartphone and tablet. YouTube quite simply sucks too much of the oxygen out of the competitive marketplace for premium services to compete effectively. Add in the fact that they are compelled to go to market with price points that only appeal to a niche of users and you have the makings of a perfect storm."

Full steam ahead!