Understanding: The Impact of Streaming versus the Music Industry

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Streaming is organically increasing. When I first wrote The Music Industry, an infinite journey way back in early 2014 I concluded the study with the chapter titled The Future, which determined how the industry would be by 2020. One section in that article covered Streaming vs Downloads, the War is open. In fact, for most people it was still unclear that streaming was going to take over from downloads – let alone physical sales. Half-way between 2014 and 2020, there is no doubt anymore about streaming dominating the industry. Plenty of questions remain though.

We are used to stating raw facts, but it is rare that we understand their meaning. Streaming took over from downloads and tons of publications mentioned it, ok. So what? If a $15 billion industry moves from one format to another should we assume that this change of format is the only real novelty? The truth is obviously much different. There are many impacts, direct or indirect. Your favorite artist may start to flop while they were successful before, and that would have nothing to do with him being urban or not. Albums won’t be released at the same date anymore. Albums won’t be in the same format anymore. We aren’t even sure if there will be albums anymore. Your country may not matter soon or, quite possibly become relevant. Marketers won’t promote artists in the same way and they won’t promote the same artists either. You won’t give the same Christmas present to your mother.  Your mother will likely start to know of the artists you listen to. Yes, the impact with the arrival of streaming is that deep.

First, it is changing the industry itself, completely redistributing the cards of the game between various markets. Second, it will require from its actors, both the labels and the artists, to fully revamp their way of working. Third, it will change your way of acting.

It is time to precisely detail all the ongoing and upcoming changes. Here is the beginning of 3 articles that will tell you exactly how the market, its actors and yourself, will evolve in the near future due to the enthronement of streaming consumption.

This first article covers the industry point of view. A lot of things have been said about streaming. People quickly started to rant against it saying platforms weren’t paying artists enough, or that it was an another much hyped fad. At some point, it was truly demonized by some – hi, Miss Swift – although now you won’t hear someone complain about it anymore. So at the end of the day, now that we have more indicators to fully understand its impact, is streaming a good or bad thing for the music industry? How is the business reacting? How will it go during the next few years? What will it change for each country? When streaming reaches its full potential will the industry be effectively dead, or will there be Thriller-esque albums released at a fast pace?

31 thoughts on “Understanding: The Impact of Streaming versus the Music Industry”

  1. China market have music store like QQ Music, someone famous singer can sold millions copies of digital record in their release day due to stan fans.
    Besides, I want to know who’s the next artist, and Barbra popularity analysis please, too! There’s so many discussion about you SCPS artist list in many music sitesor forms, and question where Barbra will rank, her real us and worldwide sales is one of the m ost mysterious in divas

    1. Hi Karalady!

      Claimed sales figures coming from platforms like QQ Music are absolutely false. If you check IFPI annual Top 50 lists, you will notice that no Chinese artist has made it in recent years with 600,000 units being enough to feature on it nowadays. All similar claims about Katy Perry or Taylor Swift are just as wrong too.

      The next CSPC artist is a male act from the past. Barbra isn’t planned over the next few ones to come soon.

      1. I see, I know ur busy in many artist SCPS, I just want to know the total physical records Barbra sold. I read your album sales figure in french form and Fan of music site, but there’s no single sales and the data was out of time, could you give us an approximately estimate of Barbra’s singles and album us&worldwide ? I know you had done some researchs and analysis for barbra before.

          1. MJD, I know ur busy in many artist SCPS, I just want to know the total physical records Barbra sold. I read your album sales figure in french form and Fan of music site, but there’s no single sales and the data was out of time, could you give us an approximately estimate of Barbra’s singles and album us&worldwide ? I know you had done some researchs and analysis for barbra before.

          2. Hi Karalady,

            I won’t commit on a figure before studying her case carefully, especially since I never studied in full her singles sales so far. After the few ones already scheduled, she will be added to the pipe for sure as she is the biggest female artist missing at the moment.

      2. That’s because they are single sales though not album sales. You download a track from the album and store it on QQ.

        They seem quite similiar to korean digital sales in that way (pre 2013 reform)

        1. Sorry I don’t know how to edit a comment 🙁
          It costs 15 yuan to store about 10 tracks (for ANTI) so it’s about 30 cents per track. Not all western albums have been released to the site though. Maybe it’s because of me being nationalistic but I don’t see what’s the difference between this and korean music platforms.
          Really hope you might reconsider and possibly take them into account in future?

          1. Hi Jack!

            I have no issue at all with counting Chinese figures. For now, I’m still pending additional information. They lack transparency, we just don’t know which song is selling what. They assign the numbers to the album, but we don’t know to which song it relates, nor we know how is it calculated, if it includes streaming units or not. At the moment, it’s sadly impossible to exploit those numbers.

          2. I used a VPN and apparently it’s like 1-2 Yuan depending on the track, but it’s not an individual track purchase. Like the number will say 10 million, but it’s 1 million people that have chosen to store the album just 10 million tracks that have been stored. Also it has real time updates so it’s pretty transparent. There’s also Netease Cloud Music and others as well. All 5 of these streaming services have more monthly users than spotify.

            The only disadvantages is the number of western albums available for purchase because they only blew up in like 2015. Like Rihanna has ANTI but nothing else, Taylor has 1989 and reputation, witness is also a big seller. And the price is cheaper.

            I think it’d be an interesting study to add on. If there’s anything chinese you need help translating i’m sure your dozens of loyal fans would help haha.

  2. In your introduction, you mention how it will change the music we listen to with our mothers listening to our music and you earlier mentionned the surprising success of “Despacito” as an example of Latin acts taking over with the booming of streaming. How does that happen ? What does it have to do with streaming ?

  3. Thanks, I’ve been looking forward to this. I know that artist CSPC articles are what *most* people come here for, but I wish we could also have more articles like this – your skills as a music business analytic are pretty much unparalleled IMO (speaking as a finance analytic myself, haha). Great job!

  4. I dont think streaming should count really,you have fanatics that will stream their favourite artists non stop that can get software like auto clicker that fakes youtube views.Plus i think everytime a song gets played on radio it should count also if these streaming sites count.What about when warner music took of loads of videos when they had a disagreement with youtube(https://www.cnet.com/news/talks-break-down-warner-music-pulls-videos-from-youtube/).what happens to the loss of streams for those artists.30 seconds to count as one stream is ridiculous it should be the full length of the song.Anyway thank you for your research and sharing your figures.

    1. Hi Me,

      Not counting streaming would be an outrageous nonsense, that’s the #1 revenue segment of the industry already. Figures of streams are gigantic, so big that the impact of a bunch of fanatics is absolutely irrelevant. In the past, you had fanatics collecting all versions of one album, here it is no different. Artists with no videos on YouTube perform better at Spotify, it is a mere transition of format so there is no loss for them, they may pretty well be winning in reality as audio streams are more profitable than video streams at the moment.

      BTW, the whole “physical sales are more valid” is utterly fake too, there was way, way more “fake” sales during years of physicals as the upcoming articles will highlight.

    1. Hi Harry,

      That’s a wrong perception. Drake’s first 3 albums sold a combined 1,737,000 units in their debut week in the US alone. All of them released in 2010 or later so those are definitely truly impressive figures. He was massive from day 1. They all sold more than Views in the US. Streaming barely made it more visible.

  5. Hi MJD,

    This article was so interesting! To be honest I thought that streaming was killing music industry because of the low pure sales that it generates.
    But your article starts to change my mind, I think your CSPC will become the basic way to count the popularity of an artist.

    I have a question, I know you’re not a medium, but do you think, in the future, we will speak about « equivalent sales » (like in the UK) or we will speak about « equivalent stream » (like in France)? Because of the streams increases, speaking of an 10 billions streams album seems to be more strangeful than a 10 million saller album.

    (I hope you can understand my « English ») 😂

    1. Hi Gonzalex!

      There is also a few more countries adopting the equivalent stream view like Denmark. It does make sense since sales will soon become irrelevant. Habits are often stronger than relevance, so we may keep talking about equivalent sales for long. Jornalists are too used to that to completely change their view right now. In many years, when most people would have live only with streaming, it may change.

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