How Streaming is Changing the Music Revenue Landscape

If you’re a music fan, you probably have noticed all the attention the industry is paying to music streaming subscriptions. But how does it work for music artists? Digital music services are reporting increased subscribers, and this translates to an increase in the average music revenue for labels. Read on to find out who streaming will benefit as revenues rise.

The Importance of Active Subscribers

The total streams are more vital to music executives than you may realize. The most active subscribers account for the majority of streams. These signups skew the allocation of the revenue towards what these vigorous subscribers find to be their favorite labels or artists.

According to industry estimates, heavy-users account for up to 16 times more than an average subscriber. This distorted allocation reflects on 30 percent of the top users actively responsible for 80 percent of streams. These users are worth 10 times more music revenue for the labels and artists than the less active subscribers.

In essence, highly active-streamers will determine the overall music revenue for the record labels. In terms of the profits they generate online, there may not be much divide between the earnest streamers and their counterparts. Differences come to the fore when labels consider making money driven by magnitude. Moreover, streams contribute significantly to chart success. Also, they create positive radio airplay attention besides generating a self-reinforcing loop.

Streaming Will Continue to Grow

As far as streaming growth is concerned, subscribers will continue to grow in importance. In the next 10 to 15 years, industry analysts predict the paid music streaming subscribers pool is will increase by a factor of five globally. You can expect this strategy to grow in importance as the pond in which these fish occupy expands.

Mass marketing driven by the love of music among different groups is genuinely transforming the industry via music revenues. With annual premium subscription incomes on the rise, digital streaming sites can pay record labels and artists lucratively. Besides, they split royalties depending on label-appeal and the artist’s share of overall streams.