Published on January 13th, 2014 |
by Alan Cross
How Streaming Will Impact Music Sales
This is from Music Industry Blog:
With 2013 now behind us we are beginning to see the first full year sales numbers come if for 2013 and the long anticipated ability to assess the impact of streaming on the market. Until the IFPI annual revenue numbers come out we are mainly constrained to volume data which only paints half of the picture. This is especially true for streaming given the massive difference in revenue per stream for free versus paid, YouTube versus Spotify etc. But even within these constraints we have enough to start establishing a view, one that indicates the headline story may be more about transition than it is growth.
Nielsen’s numbers for the US show that digital track sales were down 5.7% and that digital albums were down 0.1% while albums as a whole were down 8.4%. In the UK the BPI reported that digital track sales were down 4.2% though digital albums were up 6.8%. Nielsen also reported a 103% rise in audio streams. Let’s assume that a significant portion of those increased streams will be coming from free users and that the impact on streaming revenue growth will therefore be around the 65% mark. That would translate into total US music market revenue growth of just under 1%, though if free usage is a bigger part of the picture then growth could be negative.