After bouncing back from historic lows in March, music streaming is beginning to stall, but is it time for the industry to panic?
In the decade since its rise to industry dominance began, music streaming has consistently grown, adding more songs and subscribers with each passing day. The tech has evolved as well, allowing for offline streaming, engaging looping videos, unique artist-specific promotional opportunities, and more. Streaming is an incredible sector of the music industry, which in many ways is still in its infancy, but that doesn’t mean the good times will last forever.
There’s good and bad news, so let’s start with the good. Streaming services have continued to add U.S. subscribers this year, according to MIDiA Research, growing by 11 million paying users from January to September, to 117.9 million. Global growth has continued as well.
Now for the bad news. Despite the rising number of subscribers, the total number of streams has remained the same for the last four months. According to Billboard, audio music streams have averaged 17.5 billion a week since September. That’s up slightly from the early March pre-pandemic peak, before the lockdown cut music listening down by 13% to a year low of fewer than 15 billion streams, as consumers stopped commuting and obsessed over the news. Streaming gradually rebounded, increasing 15% by the end of June — but has plateaued since.
These numbers do not include podcast streams, which may be a good thing for streaming services. Spotify and other streaming companies have invested hundreds of millions into podcasting over the last two years. These services don’t share as much revenue with podcasts — many of which they now own — as they do musicians. A rise in podcast consumption means more money stays with the streaming service, which is bound to make investors happy, even if it means hurting the music business.
Let’s talk about the music business because that is what matters here. There are possible explanations for stagnant consumption, and most appear to be temporary. For starters, the vast majority of consumers no longer have a commute for work. The time between leaving home and arriving at a job is when many adult listeners consume the majority of their music content. A similar event is happening with young listeners and school. No bus rides, field trips, or walks to and from class equates to a lot less time when consumers are likely to put on headphones and turn on music.
There’s also an argument to be made that stagnation is due, at least in part, to a slow release schedule. While many indie artists pushed forward with release plans in light of the COVID-19 pandemic, labels with significant investments in their talent may choose to hold releases until the imminent return of live music. Labels and major talent — many of whom entered 2020 with plans and promises to release music — need the revenue from touring to recouped production and promotion costs, so until touring is feasible, most choose to hold records that may otherwise be ready to go. We’ve spoken to several labels sitting on anywhere from one to twelve releases that are completed but still have no release date because of the uncertainties surrounding live music in 2021.
These factors, plus the rising popularity of podcasts, have put the music in a unique position. While video streaming services such as HBO Max are doubling their release efforts to consumers engaging with their product, many in the music industry are trying to wait out the pandemic. They’re giving fans just enough to let them know they’re still active. Unlike most video platforms, music streaming services do not directly produce music content on their platforms. Spotify doesn’t necessarily need a new Drake release to make money. Drake and his team need that release. Apple Music doesn’t need a new Lizzo album. Lizzo and her fans need a new Lizzo album.
But should we worry? I don’t believe so. As we enter 2021 with the promise of vaccines and the potential for some level of normalcy, the industry is the most hopeful and enthusiastic it has been since March. By the time we hit the first anniversary of lockdown in three months, music’s role in the remainder of the year will be clear. If live music returns, many office jobs and schools will as well. Commutes will return, prominent artists will release big records, and live events will remind everyone what makes music special. Human beings have turned to music in the darkest times and the best moments throughout our history. The majority of consumers may be distracted by more pressing matters at the moment, but that passion has not gone away. No film or streaming series can compare to the way hearing the right song at the right time can make you feel, and that is something consumers will always want.
Be patient. The future is bright.
