How Streaming Services Shape the Music Market

How Streaming Services Shape the Music Market

Streaming services are on their way up. In the last year revenue through streaming services in Germany increased by 87.6% (according to Bundesverband Musikindustrie, BVMI). Streaming providers such as Spotify, Deezer, Soundcloud and Juke earned a total of 371 million Euros in 2014, which is one fourth of the revenue of the entire German music industry. Interestingly, homegrown German artists are leading the charts far ahead of their international colleagues. The most-streamed musician in 2014 was rapper Kollegah with 105 million listens. Downloads still form two thirds of the digital music business, but their share is declining.

A common criticism of streaming services is the feared impact on CD sales leading to falling revenue for the artists. But there are several good reasons why musicians could in fact profit from the streaming approach.

1. Streaming services are the future

Whether you’re using them or not, streaming services are likely to be the retail channel of the future. With increasing mobile network coverage, accessing an infinite music supply in an instant is becoming the norm for customers. Ignoring this trend will probably cost you in the long run.

2. An alternative to illegal downloads

Despite all efforts it is still quite easy to download music illegally. If you are willing to search a while you’re able to find almost anything. A monthly paid streaming plan makes an easy – and legal – alternative, offering diversity and value for money with a clean conscience. Streaming might be the way to get users to (again) naturally pay for music. Of course the price per title is smaller, but streaming is about quantity, getting music out to the masses.

3. Streaming services help artists promote themselves

Since the start of iTunes back in 2002 big record labels aren’t the only ones shaping the market. Before the digital revolution it was much harder and much more expensive for newcomers and musicians with small audiences to get their music out there.

With downloads and streaming, artists can save a lot on physical media, and get their music to their fans simply and easily. This also cuts out some of the middlemen, ideally leaving more money for the artist.

4. Streaming services offer valuable information

Streaming service providers also hand back vital information to musician helping them understand their fans better. Even simple things like stats on which track gets the most listens on an album. This might allow a band to adapt their playlist at the next concert or redefine their sound.

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