After years of declining sales, the
music industry has seen revenue increases the past two years. Do you think the
industry has finally found a way to adapt to the changes in ways people consume
music? Do you think that sales will continue to increase, flatten, or decline
in the coming years? Limit: 7 responses
Angie King
ReplyDeleteThe music industry has finally experienced an increase in revenue after declining sales, largely due to the fact that it has adapted to today’s technology. It saw the way consumers wanted content, and adapted their business models accordingly. How did they adapt? Streaming. In terms of music consumption, “overall volume is up 3% over 2016, fueled by a 76% increase in on-demand audio streams, enough to offset declines in sales and return a positive year for the business” (“2016 U.S. Music Year-End Report”). The music industry was able to sense popular consumption trends and adapt. One interesting trend was the vast popularity of streaming R&B/Hip-Hop. Nielsen’s extensive recap of 2016 noted “rock continues to be the dominant genre in terms of album sales (both physical and digital), but the streaming landscape is led by R&B/Hip-Hop, which garners the highest share of on-demand audio streams with heavily streamed artists like Drake, The Weeknd, Kanye West, Rihanna and J. Cole” (“2016 U.S. Music Year-End Report”). Essentially, as long at R&B/Hip-Hop artists keep creating content, the music industry will continue to flourish. In 2016, the top five artists ranked by on-demand streaming were all at R&B/Hip-Hop artists. Drake topped the charts with a record-breaking year, followed by Future, Kanye West, Rihanna, and The Weeknd. In 2016, Drake “had the most overall volume; the most digital song sales; the most streams (by a huge margin); and the most heavily consumed album of the year with Views” (“2016 U.S. Music Year-End Report”). Drake also just recently dropped his new album More Life, adding potential for more record-breaking stats in 2017. Not only have consumption trends and genre tastes changed, but people at the top of the music industry understand the need for adaptation too.
The Grammys have finally embraced streaming. The Recording Academy “announced that streaming-only releases will now be eligible for consideration for Grammy nominations, one of five big changes that will be implemented immediately” (Rys). This announcement shows that the people highest in the music industry understand the importance of embracing streaming. If they didn’t they would find themselves outdated. Recording Academy SVP of Awards Bill Freimuth noted that “the process for the changes is one of the elements of the overall process of which I’m proudest, because it keeps us as current and as relevant as we can and it keeps the process dynamic. We’re happy about that and we’re glad to make changes every year” (Rys).
The music industry should expect to see an increase in sales within the coming years because of the nature of the streaming services. If streaming services is what’s keeping the music industry afloat, then there should be an emphasis on its survival. The one thing that “should continue to drive streaming’s success is something that download business never really had: competition. The major labels have a vested interest in Spotify’s success – literally, since together they own an estimated 18 percent equity in the company 00 but they also want to be sure one company doesn’t end up controlling the streaming market in the way Apple dominated downloads” (Levine). The streaming business’ growth and longevity will determine the success of the music industry as a whole. As of now, Spotify, Apple Music and others show substantial growth in the coming years, so the music industry should expect the same.
DeleteWorks Cited
“2016 U.S. Music Year-End Report.” Nielsen. 09 January 2017. Web. 27 March 2017.
Levine, Robert. “Is the Record business Really Back? How Streaming Is (And Isn’t) Turning a Profit.” Billboard. 03 November 2016. Web. 27 March 2017.
Rys, Dan. “Recording Academy Embraces Streaming with Changes to Grammy Rules.” Billboard. 16 June 2016. Web. 27 March 2017.
For several of years, there has been a decline in sales within the music industry. The music industry has noticed that people were not buying albums, CD’s and records like they used to buy.
ReplyDeleteDespite physical albums and digital music sales plummeting, I believe the music industry has finally found a way to adapt to the changes in ways people consume music. Instead of buying music in forms of albums, CD’s, and digital albums and songs online, the majority of people are now turning to streaming to get their music. According to Stu Bergen, Warner Music Group CEO of international and global commercial services, “We’ve reached a place where our largest source of revenue is increasing” (Levine, 1). He also adds, “That is a good feeling after the long decline of physical” (Levine, 1).
After years of declining physical sales in the music industry, the music industry has seen revenue increases the past two years. Revenue and sales have been increasing in the music industry due to the help of streaming services such as Spotify, Apple Music, Pandora, and other streaming services. According to the RIAA, “recorded music sales increased primarily due to an increase in digital streaming revenues” (Flanagan, Blair and The Associated Press, 1).
Through streaming, the music industry has seen a profound growth in terms of sales. “The RIAA announced recently that, largely thanks to streaming, the U.S. recorded music industry had seen an 8.1 percent growth this year (in 2016)” (Flanagan, Blair and The Associated Press, 1).
While digital album and digital song sales have been plummeting over the past few years, there has been a 3 percent increase in music business sales thanks to the help of streaming. “In 2016, the (streaming) industry tallied 561 million album-consumption units, according to Nielsen Music, a 3 percent increase over 2015’s 543.8 million units—the first time during the millennium that the industry has posted gains in two consecutive years” (Christman, 1).
Even though the streaming business is looking really healthy for streaming services such as Spotify and Pandora, the companies need to be careful. If the companies and other streaming services do not find a method of steady, sustainable income and profit, there is a possibility of one or more companies falling and crashing, hard. “A broad economic downturn could hurt Pandora’s stock price or Spotify’s projected IPO, forcing those companies to readjust their business models, or even scaring other companies out of the market” (Levine, 2).
Despite the initial scares of streaming services falling, in the coming years, I believe that music sales, in terms of streaming, will continue to increase. “A U.S. Department of Commerce report from October estimates that global streaming revenue will balloon to $5.4 billion by 2019, while a study by IHS Market expects the number of U.S. on-demand subscribers to triple by 2020” (Rys, 2).
Most music lovers today love streaming—all of their music is at the tip of their hands and they can listen to any song, anywhere and at any time without having to purchase an entire album to listen to the song they want.
The music industry has evolved from record players, to albums, to CD’s, to digital downloads, and to finally, streaming. I believe the music industry will continue to evolve in order to not only make a profit but to also give what music lovers love—a chance to enjoy their favorite music in a convenient, joyful and satisfying manner. “As our access to music evolves, so will the way we listen. In the end, that’s a good thing” (Ihaza, 2).
References
DeleteChristman, Ed. “Nielsen 2016 Report—Streaming Smashes From Adele, Drake & More Offset Sinking Music Sales.” 9, Jan. 2017. Web.
Flanagan, Andrew, Blair, Gavin J., and The Associated Press. “Sony Sees Music Revenues Jump Thanks to Streaming.” 1 Nov. 2016. Web.
Ihaza, Jeff. “The Playlist is the New Album.” 14, March 2017. Web.
Levine, Robert. “Is the Record Business Really Back? How Streaming Is (And Isn’t) Turning a Profit.” 3, Nov. 2016. Web.
Rys, Dan. “2017 Streaming Wars—Will Spotify, Apple Music or Amazon Dominate?” 6, Jan. 2017. Web.
After years of declining sales, it makes sense that the music industry has seen revenue increases the past two years, because the music industry has finally modernized to today’s technological advances, especially those in the music industry. In Sony Sees Music Revenues Jump Thanks to Streaming, an article by Andrew Flanagan he states that “recorded music sales increased primarily due to an increase in digital streaming revenues. The RIAA announced recently that, largely thanks to streaming, the U.S recorded music industry had seen an 8.1 percent growth this year”(Flanagan). It is possible that music sales were declining because people had found their way around buying singular music titles through companies like apple. For a long time people had turned to illegally downloading music off of second hand sites, or simply ripping mp3 off of videos on platforms such as youtube. As people keep finding ways to get around paying for individual music, it was about time the music industry had come up with music streaming. With streaming sites like spotify, all members have to due is purchase a member fee and they are instantly introduced to new music as it is released, and thousands of music titles. When it all adds up, it seems this method of streaming is cheaper than it would be to individually buy and download singular music titles.
ReplyDeleteAnother thing that makes streaming platforms more attractive to music buyers is the fact that they are able to personalize their music library. In the article entitled The Playlist is the New Album “The playlist, which exists on these platforms as exclusively curated sets of music from popular artists, has evolved from the old days of crudely aggregated tracks that belonged to a specific genre or amorphous “mood”(Ihaza). Instead of listening to one continuous artist, music listeners are able to personalize their playlist based on “moods” or “genres” making their playlist more accessible to themselves and to the people that choose to follow these playlists, which is another attractive characteristic of music streaming platforms. They have advanced these platforms to make them more communicative, and social media like by being able to “follow” your friends and see their playlists as well, so people are able to be connected through their music preferences.
As for the question of will their sales increase? I would presume so, only if music companies continue to modernize themselves and think ahead. Music streaming sites have the upper hand because they release new music as it is released, something that not many sites or apps can offer to their customers. For example, in the atlantics article entitled The Death of Music Sales it says that “If CDs are truly dead then digital music sales are lying in the adjacent grave. Both categories are down double-digits in the last year, with iTunes sales diving at least 13 percent.”(Thompson). This article, not even a year old has proven that digital sales had plummeted but now with apples new release of Apple Music, a streaming app that runs on a month to month pay basis like spotify, it has modernized itself and brought in new revenue.
Flanagan, Andrew, Blair, Gavin J., and The Associated Press. “Sony Sees Music Revenues Jump Thanks to Streaming.” 1 Nov. 2016. Web.
Ihaza, Jeff. “The Playlist is the New Album.” 14, March 2017. Web.
Thompson, Derek. "The Death of Music Sales." The Atlantic. Atlantic Media Company, 25 Jan. 2015. Web. 28 Mar. 2017.