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In 2022, streaming revenues reached 17.5 billion U.S. dollars worldwide, the highest ever recorded and more than six times the figure given for 2015, when music streaming revenue amounted to 2.7 billion. Streaming revenues now account for over 67 percent of global recorded music revenue.
The music industry is changing
Over the last two decades, the music industry has been heavily impacted by the development of technology and the internet. Physical sales were the main source of revenue in the music industry before digital formats were invented. Even in 2000, U.S. album shipments still amounted to 938.9 million U.S. dollars before dropping each year until the figure stood at just 31.6 million in 2020. This development is also mirrored in music industry revenue trends. Streaming has dramatically increased its share of U.S. music industry revenue, making up 83 percent in 2020, up by almost 20 percent from the figure recorded in 2017. Meanwhile, the share of music revenue generated by physical sales has decreased in equal measures, and in 2020 accounted for just nine percent of the total.
Streaming platforms
With 82.1 million paying music subscribers in the United States, streaming platforms have become an essential part of the music industry’s landscape. Swedish streaming giant Spotify has dominated the market for years and commands 32 percent of music streaming subscribers in the United States. On the other hand, Apple Music, making up 16 percent of the market, and Amazon with 13 percent, have struggled to keep up with Spotify’s growing audience. In the third quarter of 2021, Spotify’s revenue from its premium subscribers hit 2.2 billion euros and the climbing number of ad-supported users brought in an additional 323 million euros. By comparison, just five years earlier in the corresponding quarter of 2016, Spotify’s premium subscriber revenue was 673 million euros and its ad-supported revenue almost half the figure recorded in Q3 2021.