2018 has been an incredible year for streaming so far. According to Nielsen Music, music listeners in the U.S. streamed 403.4 billion recordings in the first half of 2018. This is a 41.6% increase from 2017, which means 284.8 billion more recordings were played.
What’s even more exciting is that the growth of streaming also creates more engagement from users. Not only the growth of Spotify, Apple and Amazon throughout 2018 helps grow streaming, but also listeners are listening and sharing more music more than ever this year. So, it is safe to say that the 41.6% growth rate is a much more important figure than the pure growth of the audience.
To add to engagement, revenue is also going up rapidly. Streaming is still in its growth phase and based on the mid-year numbers, that growth is accelerating at a rapid rate. While the mid-year revenue numbers are not yet out yet, at the end of last year streaming revenue grew 43% to $5.665 million from $3.962 million in 2016. Many analysts say that the subscriber growth will likely slow some time in 2019, however consumption will continue to grow strongly. One of the most important factors for this is because free usage of streaming platforms like Spotify are taking radio audiences.
According to Nicky Kalliongis, Co-Founder & Managing Director of Whale Report, emerging markets like Latin America, China, India, Russia and Africa offer huge potential for streaming growth. There are billions of people living in these areas who have not regularly bought CDs, Vinyls, Cassettes before and now are very eager to use streaming. He also adds that this also is important for ad supported streaming, because as online advertising spend continues to rise globally, ad supported streaming should benefit from higher cost per impressions, which can help close the gap between ad and subscription pay rates.
We don’t really know when the music subscription market might reach its saturation point. It could take 2-3 years or 10 years. Until then, there is much revenue to be generated by artists from streaming.
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Alper Tuzcu is a Berklee College of Music and Denison University alumni, and a Boston based guitarist, songwriter and producer. His new EP ‘Lines’ was released on November 2017 and his debut eclectic album ‘Between 12 Waters’ featuring 8 different vocalists is available on Spotify. In addition to being a musician, he regularly teaches workshops and masterclasses internationally. You can follow him on Instagram or Twitter, and for more information you can visit his website www.alpertuzcu.com