Reports Music

The Streaming Effect Assessing The Impact Of Streaming Music Behaviour

Report by Alun Simpson and Mark Mulligan
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The 20,000 Foot View

Streaming has arrived and is here to stay, that much is clear.  What is not is how it will impact existing music revenue streams.  Though neither a business model nor a product, streaming is the lens through which the irresistible force of the shift from ownership to access is best understood.  The first shift to digital was as disruptive as it was transformative.  The shift to access based models though represents a more dramatic shift that challenges existing business models to the core.  The first wave of subscribers was harvested directly from the most valuable download buyers, denting music sales in the process.  The next wave must both better compete with free streaming and draw from a more mainstream customer base.

Key Findings

  • Free streaming            where the heat is: global            will total            million by the            of 2014 but ad supported            will reach            million
  • But free            not yet effectively monetized: ad            average revenue per user will                       by the end of 2014,            to            for paid subscriptions
  •            of consumers are music streamers, with a fifth of them paying to stream             to            years olds have the highest paid-to-free ratio while            to            year olds have the highest overall streaming penetration at                       of music streamers stream audio for free and            stream music videos
  • Free is            willingness to pay:            of music            won’t pay for music because            get all they need for            from YouTube
  • Streaming is            music buying:            of music streamers            stopped buying more than one            a month
  • Download sales            continue to feel the pinch                       of all music downloaders also            streamers
  • Significant opportunity            remains untapped: only            of streamers            tried a subscription trial while            pay for one
  • Streaming has            the impact of piracy by            a hierarchy of free in            consumers have multiple free alternatives

Companies mentioned in this report: Spotify, Apple, Amazon, YouTube, Nielsen, Triton, Adswizz, Beats, Bandpage, Topspin