Futuresource: Music Streaming Declines in COVID-19 World

With the exception of vinyl records, subscription streaming music services remain the number one growth driver in the global music market, accounting for more than 70% of spending on music last year, according to Futuresource Consulting.

Yet, as measures to halt the spread of COVID-19 begin to reshape the lives of consumers, music streaming is experiencing a temporary decline, with consumption down from 15% to 20%.

“We may have expected to see an uptake in the use of streaming music services, as people become confined in their homes,” market analyst Alexandre Jornod said in a statement. “This is linked to consumers adjusting to new confinement rules, which have removed key music listening situations like the daily commute, as well as office and gym time.”

Follow us on Instagram

Futuresource says that as families spend more time at home together, music consumption is becoming a shared activity. Before the pandemic people were using separate accounts to play different music, now smart speakers are likely to be used with a single account used to play music in the household.

The London-based firm said there is also competition from gaming, movie and TV show streaming. These activities require a higher level of attention and tend to be favored when some extra time is freed up as a result of routines being interrupted.

“Once consumers become accustomed to the situation and establish new routines, we expect streaming music to get back to levels similar to before the crisis,” Jornod said. “Home listening will dominate, with a shift in the music types and genres as consumers seek out lean-back mood playlists as opposed to searching for specific songs or artists.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Meanwhile, Futuresource said Spotify and Apple account for more than 60% of combined global subscriptions. Spotify remains No.1 globally, with Apple No. 1 in the United States. Amazon Music’s multiple streaming plans cater to a wide audience, although its subscriptions are closely linked to Echo smart speaker geographies, which skew heavily towards the U.S. and U.K., according to Futuresource.

The research firm contends Google-owned YouTube Music has the potential to become a key player thanks to its established YouTube audience. Smaller players like Deezer, Tidal and Napster are focusing instead on strategies such as targeting local markets, serving niche audiences or B2B operations.

“Streaming music subscriptions also benefit from markets where physical media has been historically strong and they are now transitioning to streaming,” Jornod said, alluding to Germany, Japan and France, which he said are experiencing accelerated adoption — unlike maturing markets in North America.

“Watch out for a rise in podcasts beginning to exert its influence, as well as enhanced listening experiences such as Hi-Res audio, Dolby Atmos Music and Sony 360 Reality Audio,” Jornod said.

RIAA: Recorded Music Sales Up 13% to $11.1 Billion in 2019

When streaming is your friend, the fiscal outlook never looked better. The Recording Industry Association of America (RIAA) disclosed that sales of recorded music in the United States grew 13% to $11.1 billion.

About 80% of that revenue came from subscription streaming services such as Spotify, Amazon Music, YouTube Music and Apple Music, among others. Indeed, the RIAA said streaming revenue alone ($8.8 billion) topped the entire U.S. recorded-music market from just two years ago. Music consumers streamed more than 1.5 trillion songs in 2019.

Follow us on Instagram

Meanwhile, vinyl records continue their comeback, generating a 19% increase in sales — the largest revenue for the format since 1988 Overall, packaged music sales dipped 1% to $1.15 billion — largely due to a 12% decline in music CD sales.

Notably, digital music download sales dropped 18% to $856 million, marking the first time since 2006 that revenue fell below $1 billion.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Music is by far the biggest draw to tech platforms, gaining views and listens that generate enormous revenues for distributors,” Mitch Glazier, CEO of RIAA, said in a statement. Music companies have driven a fourth consecutive year of double digit growth and continued to build a digital-driven industry with a focus on the future.”

 

Spotify Files Complaint Against Apple Music with European Commission

Spotify, the world’s largest music streaming service, has filed a complaint against Apple with the European Commission alleging the tech giant unfairly restricts competition against the Apple Music service.

Spotify ended its most-recent fiscal period with 87 million paid subscribers compared to about 50 million for Apple Music.

In a March 13 blog post, Daniel Elk, founder and CEO of Spotify, said Apple has changed the rules and stifled innovation how it operates the proprietary App Store. Elk argues that as Apple is both the owner of the iOS platform and the App Store — a competitor to services like Spotify, which gives the company an unfair advantage.

Specifically, Spotify takes issue with the 30% tax it and other digital services must pay utilizing Apple’s payment system. If the service opts out of the payment platform, Spotify alleges Apple restricts how it can communicate with its subscribers outside the app, in addition to limiting tech and user-enhancements.

“In some cases, we aren’t even allowed to send emails to our customers who use Apple,” Elk wrote.

The executive said apps should be able to compete fairly on their merits and not based on who owns the App Store. He said consumers should have a choice of payment systems and not be forced to use systems with discriminatory tariffs.

Elk said the App Store should not be allowed to control the communications between services and users, including allegedly placing unfair restrictions on marketing and promotions that benefit consumers.

“After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition,” he wrote.

 

 

 

Music Streaming Services Appealing Royalty Increase for Artists

Subscription streaming music services such as Spotify, Pandora, Amazon and Google are planning to appeal proposed royalty rate increases for artists finalized last month by the Copyright Royalty Board.

It marks the first time music distributors have appealed compensation rates to artists. Apple Music, the world’s largest streaming service with nearly 50 million subscribers, is not contesting the royalty hike.

The three-member CRB ruled last year — in a 2-1 vote — to increase artists’ share of streaming and record label revenue from 10.1% to 15.1% through 2022.

The streaming services and artists groups spent millions lobbying their sides of the debate. Spotify & Co. contend the decision to increase artists’ compensation involved “serious” procedural and “substantive” concerns.

“If left to stand, the CRB’s decision harms both music licensees and copyright owners,” the services said in a joint statement. “Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”

David Israelite, CEO of National Music Publishers Association, criticized the streaming services for undermining the artists that drive consumer adoption.

“When the Music Modernization Act became law [in 2018], there was hope it signaled a new day of improved relations between digital music services and songwriters,” said Israelite. “That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third.”