Sales of music CDs are waning big-time. Digital downloads from iTunes and Amazon are declining, too. The reason: listeners are flocking to streaming music services like Pandora, with 79 million users, and Spotify with 75 million (see the list of players below).
Despite robust customer counts, however, neither Pandora nor Spotify appears to be making money, and recording artists are unhappy with meager royalty payments. That struggle for a business model may mean, reports John McDuling in Quartz that it will be tech giants Apple, Google and Amazon who determine the industry’s future.
In June 2015 Apple, already the leading seller of digital downloads via iTunes, announced its Apple Music streaming service, born out of its 2014 acquisition of Beats Music. The company also touted enhancements to its free iTunes Radio service. Despite starting from scratch in the streaming space, Apple will have the huge advantage of its installed base of iPhones, iPads and iTunes customers.
Google, with its Google Play, YouTube music videos and Android phone presence, will likely step up to the streaming challenge, as will Amazon with its Amazon Prime Music service.
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PLAYERS IN THE STREAMING MUSIC INDUSTRY (latest counts as of 6/10/15) |
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| Internet radio (typically passive listening, free with ad support) | ||
| Pandora | 79.2 million active users of free, ad-supported tier | algorithmic selections from 1 million songs based on “music genome”; small subscription base @ $5/mo eliminates ads |
| TuneIn Radio | 50 million users worldwide | 100,000 radio stations, 4 million podcasts |
| Clear Channel’s iHeart Radio | 48 million monthly listeners | 1,500 live radio stations; custom playlists from 18 million songs |
| iTunes Radio | 27 million songs | |
| Songza | 5.5 million users | human curators (purchased by Google) |
| Slacker | 4 million users | |
| On-demand streaming (active listening based on specific listener choices) | ||
| Spotify | 75 million active users, 20 million paid subs @$10/mo | library offers >20 million songs |
| Deezer | 16 million listeners, mostly in Europe; 6 million paid subs | 2014 launch in U.S.; purchased popular Stitcher mobile app |
| Rhapsody | 1 million paid subs | as of early 2013 |
| Rdio | “small by comparison” | 20 million songs available |
| Beats Electronics | 250,000 accounts | (acquired by Apple 2014) |
| YouTube | rumored subscription music launch soon | huge traffic in free music videos |
| Amazon Prime Music | recently launched | streaming music free to Prime members |
More information about streaming services here and here.
See also: “Revenue Streams” [New Yorker]