Online internet streaming, its not only saved the economy billions of dollars lost in piracy and falling prices in the music industry for the last two decades. Paid streaming services like Spotify Ltd and Apple Music have enabled there to be a flow in the sale of music.
Is slowly recovering after years of being in crisis and sales peaked. Retail spending on music grew by 8.1 % resulting in a total sale of $3.4 billion in the first half of 2016( report by Recording Industry Association of America) online streaming has introduced a monthly fee or for free if willing to hear ads. This has increased the revenue by 57 percent to $ 1.6 billion in the first half of 2016 accounting to almost half of industry sales.
“it feels like the market is slowly recovering after years of being in crisis and shrinking,” said Zach at BMG Rights Management GmbH, a record label and music publisher whose artists have included M.I.A and Blink 182. “Its absolutely a step in the right direction.”
The evidence of the progress can be seen as three major record labels , Vivendi SA’s Universal Music Group, Warner Music Group( owned by billionaire len Blavatnik, and Sony Music Entertainment have all reported gain in the course of the year.
ONLINE AND OFFLINE MUSIC WORLDs : STILL WARY
The industry however, is still reluctant to announce this victory over low prices owing to the fact that the profits and annual sales are down by half compared to 1999 peak ( $ 7 billion ). Negotiations however among the labels and potential contractors such as Google Inc’s You Tube and Spotify, two of the largest purveyors of free music in the world. This will ensure that the profits increase.
From statistics, sales from ad-supported, on- demand streaming have grown to $195 million in the first half of 2016 but they aren’t convincing people to buy music. They also make less money than expected from their few users said RIAA Chairman Cary Sherman posted in a blog.
“Many services rake in billions of dollars for themselves on the backs of music’s popularity but pay only relative pennies for artists and labels,” Sherman wrote. “Pirate sites operate with seeming impunity.”
From past experiences such as i Tunes, who introduced the new technology where payment for music was mandatory as Steve Jobs (founder) had convinced record labels that they will save the industry from piracy but ended up vaporizing the album sales by selling singles.
The increased competition in the streaming industry has helped increase the industry’s sale companies such as Sportify who have strong client loyalty are giving Apple Music a run for their money according to label executives. Other large entities such as Amazon.com Inc., one of the largest internet retailer in the world is also introducing paid music services.
It will introduce a Standalone music service by the end of the year.
Pandora Media Inc. has also joined the league of paid music streaming .they aim to convert 10% of its 78 million free users into paying customers.
I Heart Media Inc. also in the run for the online streaming industry as reported by the New York post.
MORE GOOD NEWS?
To ensure that the good news increases, the online purchase should be supported in order to increase these sales as we all know that physical buying of music is not as used as streaming.
“We are starting to see on-demand music streaming as no longer a thing that hipster collage kids and young people do,” said Larry Miller, a former industry executive who now teaches music business at New York University.
Here’s an inforgraphic to illustrate it :
Online streaming has gone viral with countries such as South Korea which has emerged as one of the 10 largest music market in the world, this is twice the size of the market from a decade ago. This information is according to the Federation of the Phonographic Industries.
China on the other hand took a head start in this market as from 2004 but with the increase in piracy, it was taken back by $23 million in 2010.
By 2014, the market in China reached $100 million for the first time in over five years with streaming as a major contributor to this recovery