Streaming Music Health Check Streaming’s Watershed Moment

The 20,000 Foot View:            2016 emerged as a watershed moment for streaming music, with label streaming revenue growing strongly enough to lift overall revenues for all three major labels. Meanwhile Spotify and Apple registered record growth, soon followed by streaming announcements from Amazon, Pandora and iHeart Media. 2016 was the year that streaming stepped up its game, but many of the long-term market challenges remain, such as commercial sustainability of the music subscription business model, concentration of growth and consumer willingness to pay. In this report, we pull together data from record labels, music services and consumers to create a definitive assessment of where the streaming music market has got to. Key Findings

• By September            Spotify had            million subscribers (with            paid to rights holders to            while Apple had            million subscribers
• Competition is            up with announcements from Amazon,            and Vevo
• Each of            three major labels experienced strong            year-on-year revenue growth in            2016:                       Universal            and Warner           
• In            2016,            label download revenue fell by            quarter-on-quarter, only            million less than                       million by which streaming grew
• Paid subscribers            globally from            million in            2015                       million in            2016. However, Spotify            Apple accounted for virtually all            growth
           of all streams were mobile, rising to            for Napster            of UK subscribers and            of UK free streamers regularly stream on Wi-Fi            of all streams come from playlists. However, just            come from push playlists            of UK subscribers say that playlists are replacing albums for them, while            say they are using curated playlists more than            months ago
• Just            of            spend more than            on music,            that subscriptions have capped spending            super fans
           of subscribers have changed subscription service, falling to just            in Sweden thanks to Spotify loyalists             of UK subscribers sign up to multiple streaming trials with different email addresses, while            use free trials to get access to exclusive albums

Companies mentioned in this report: Alphabet, Amazon, Anghami, Apple, Beatport, Deezer, Google, iHeart, KKBox, Last.FM, MelOn,            Napster, Orange, Pandora, QQ Music, Rdio, Sony Music, SoundCloud, Spotify, Tidal, Universal Music, Vevo, Warner Music, YouTube