When free music is available at the whim of the user, why will someone pay for a music streaming? Paid music streaming concept is emerging, with many industries bringing in more and more apps into this industry. Has the industry already reached its maturity or is it still in infant stage? Is it profitable for companies to keep harboring on this niche segment? What is the scope of this industry? How music streaming can help musicians?
Today if you want to listen to music, you have two options- download it or stream it. It can be downloaded from either authentic musician sites or pirated versions from other music sites. On the other hand, music can also be streamed on YouTube Music Key, Spotify and the like, without having any physical copy of the same on your hard disk. The playlist is run online. If you don’t want any advertisements to interfere then you go for subscriptions. When it comes to music, it’s hugely depends on the customer base and the way people prefer listening to music.
The music listeners are also divided into segments: there are purists/audiophiles who will go through all the hassle of downloading music from authentic sites and then there are casual listeners who are passionate to listen to music but they are not particular about whether they own it or rent it. It has been observed that the consumers are moving more and more towards online channels from the traditional channels. According to IFPI (International Federation of the Phonographic Industry), the global digital revenues have increased by 6.9% to US $6.85 billion such that share of revenues is almost same for digital (46%) and physical channels (46%).
The musicians will get to use the statistics drawn from the music streamed by the individuals. The name, place, date, genre and the way the people listen to music can help determine the trends emerging in the music industry. There has been some serious debates regarding the revenues generated digitally by streaming channels for singers and song writers. So let’s see, apart from revenues, what’s in there for singers and songwriters:
Market segmentation– The Company can help the musicians to track the geographies in which their music was played and how often their music was played and its related ratings. The genre of the music listened most can also help songwriters and musicians in understanding that what is going wrong with their music and what is the tipping point in competitor’s music.
Demographics- They can narrow down on the age group listening to their music and also analyze based on data what type of music is preferred by their target segment. This information may help them to create music which has more probability to sell. I know, music should come from heart and everything but if there is an extra help to musicians to make their music sell then why not!
Medium: They can decide on the medium to channel their music. Taylor Swift recently pulled all her music tracks from Spotify as according to her,it was not doing justice to revenues that she would have got from other traditional channels. On the other hand, the new artists find the streaming service a huge opportunity for them to reach to a larger audience even though the revenue generated by it is comparatively lesser.
Recommendations: According to source, Pandora’s Music Genome project, which is a unique music catalog of more than 1.5 million songs, helps in creating plethora of recommendations for users. Although, they cannot change the choice of customer but to some extent they can influence the decision-making process. Songs recommended by the Spotify, Pandora and the like music streaming services are likely to introduce the user to some new songs in playlist pushed by these services. The singer can push their songs in these playlists, based on that they can gauge the audience reaction.
Companies such as Pandora, Rdio, Spotify, etc although still are in their nascent stage are leveraging on all the possibilities to benefit the user as well as the musicians by using various advanced data analytics and algorithms. Only time will tell whether music streaming is a dying industry or just a late bloomer.