Dollars in the Stream: On-Demand Audio Doubles Amid Declining Song Sales
Paid subscriptions for on-demand audio services rose by 125 percent last year, according to a new report.
Music sales might have continued to slip in 2016, but on-demand streaming services nearly doubled last year – this according to a new report from BuzzAngle Music.
On-demand audio streaming increased by 83 percent last year, capping at a whopping 251 billion streams. That’s 84 plays per person on Earth with access to the Internet. Conversely, total song sales (online and physical) dropped 25 percent and record sales fell 16 percent, per the report.
Interestingly, despite physical album sales dropping by 12 percent, vinyl album sales posted a 26 percent gain in 2016, perhaps as a result of Millennials’ ambivalent attitudes toward technology and nostalgia.
The promising news for streaming service providers is that music fans are increasingly paying for premium products. In fact, BuzzAngle found that subscription services are growing at a much faster rate than ad-supported services. This makes sense given consumer preferences toward paid alternatives that offer limited commercial interruptions. (Millennials are the “Netflix generation,” after all.)
Experts say all of this points to the fact that the music industry is back, albeit in a somewhat different form. Jesse Kirshbaum, Co-founder and CEO of NUE – a creative agency that aligns brands with talent to become more culturally relevant – says that the expanding role of music in culture is shifting the way consumers experience it.
“People might be buying fewer records, but this shouldn’t be news to any of us,” said Kirshbaum. “The reason the music industry continues to flourish is that musicians, labels, platforms – everyone in the game – has found ways to connect with people and create dollars in ways that go beyond the listening experience.”
For example, supporting a musician is no longer just about buying a record. It’s watching them headline their favorite music festival, buying exclusive merch online, listening to them at work or at the gym, and following them across a range of social media channels.
Digital media has even seemed to revitalized radio, with podcasting making audio formats more popular than ever and properties like iHeartRadio continuing to groom the next generation of radio enthusiasts. Facebook recently announced that it would be rolling out a stripped down version of its live video product to allow users to livestream audio content to their networks.
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