MIDiA Chart Of The Week: Music Discovery

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by Mark Mulligan

midia free streaming discovery

When YouTube first starting rising to prominence streaming music was still in its infancy.  Thus even though royalty payments were far form setting the world alight, there was a clear case for YouTube views driving discovery which then led to sales.  Fast forward to 2015 and digital sales are rapidly losing ground to streaming which in turn throws into question the entire raison d'etre of on demand free streaming as a driver of sales. Add into the mix a host of other free streaming alternatives (Soundcloud, Spotify free etc.) and that only a minority of consumers use free streaming to discover new music and you have the ingredients for a perfect storm.

39% of consumers regularly stream music for free, nearly four times the rate that pay for music subscriptions.  While free tiers of paid services play a clearly defined subscriber acquisition role, the purpose of standalone free services is becoming less clear-cut:

  • Old favourites trump new gems: Half of free streamers say they use these services mainly to listen to music they already know. While it would be unrealistic to expect anything other than the most on-trend of super fan to be spending all their time sampling new tunes, these trends illustrate that free on demand streaming services are most used as consumption destinations.
  •  The end goal has changed: Just under a third of free streamers go onto buy the music of artists they discover on these service while 37% simply stream newly discovered artists more. Both use cases will coexist for some time, but with with music purchasing fading phenomenon, the latter will dominate.
  • Live may be the long-term beneficiary: Throughout the last decade the live music business grew almost dollar-for-dollar at the rate the recorded business declined.  It is a natural evolution of spending from the once-scarce recorded product to the still-scarce live product.  Streaming services, Spotify in particular, have been keen to emphasize that they help drive live revenue by driving discovery.  A quarter of free streamers go onto watch newly discovered acts perform live.

Free on-demand streaming is first and foremost music consumption, secondarily it helps drive ticket sales, and thirdly it helps drive sales, but in dwindling numbers.  If this is already how you understand the role of free on-demand streaming then you’ve grasped the new reality.  If not, you have some work ahead of you.

If this is a topic that interests you, read the MIDiA report from which this data and analysis comes: 'Streaming Music Discovery: When The Journey Becomes The Destination'.  The full report and data set is immediately available to MIDiA clients as part of the standard subscription.  If you would more information on how to become a MIDiA client visit our Research page or email us at info AT midiaresearch DOT COM.

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