Music streaming service
A music streaming service is a type of streaming media service that focuses primarily on music, and sometimes other forms of digital audio content such as podcasts. These services are usually subscription-based services allowing users to stream digital copyright restricted songs on-demand from a centralized library provided by the service. Some services may offer free tiers with limitations, such as advertising and limits on use. They typically incorporate a recommender system to help users discover other songs they may enjoy based on their listening history and other factors, as well as the ability to create and share public playlists with other users.
Streaming services saw a significant pace of growth in the late 2000s, overtaking music stores as the largest revenue stream of digital music. Streaming services, along with streams of music-related content on video sharing platforms, were incorporated into the methodologies of major record charts. The "album-equivalent unit" was also developed as an alternative metric for the consumption of albums, to account for digital music and streaming. The rise in popularity of music streaming services started in 2005 and has continued to grow steadily. Consumer preferences moving away from traditional physical media towards streaming platforms, attributed to their convenience, variety, and affordability.[1]
Impact[edit]
By 2013, on-demand music streaming had begun to displace online music stores as the main revenue stream of digital music.[15] In March 2022, the International Federation of the Phonographic Industry (IFPI) reported that global wholesale revenue in the music industry had increased by US$4 billion year-over-year (YoY) in 2021—its largest increase in the past 20 years—with paid music streaming services accounting for $12.3 billion in revenue ($2.2 billion YoY), and ad-supported streaming $4.6 billion ($1.1 billion YoY). Revenue from music streaming services had more than doubled since 2017, and the estimated number of users of paid services exceeded 523 million.[50]
Music streaming services have faced criticism over the amount of royalties they distribute, including accusations that they do not fairly compensate musicians and songwriters.[51][52] In 2013, Spotify stated that it paid artists an average of $0.007 per stream. Music Week editor Tim Ingham commented that while the figure may "initially seem alarming," he noted: "Unlike buying a CD or download, streaming is not a one-off payment. Hundreds of millions of streams of tracks are happening every day, which quickly multiplies the potential revenues on offer – and is a constant long-term source of income for artists."[53]
Billboard introduced a Streaming Songs chart in January 2013, which would be based on the viewership of videos containing songs on platforms such as YouTube, and streams on platforms such as Spotify.[15][54] In 2014, the UK Singles Chart similarly changed its methodology to include streaming.[55] To account for digital streaming and the decline of album purchases, charts began to adopt a metric known as "album-equivalent units" (AEUs), which are based on purchases of the album, and how many times individual songs from the album have been purchased or streamed.[56][57] In 2016, the German charts made a similar change, with metrics based on revenue (thus only paid streaming services count towards it).[58][59]