The Strategist

Nielsen: 2017 is the year of music streaming

07/24/2017 - 14:55

Research company Nielsen reported that number of on-demand audio streams in the US alone amounted to 184 billion in the first half of the year, which is 62% more than in the same period last year. On the other side of the ocean, in the UK, streaming audio is developing at an equally rapid pace, showing an increase of 53% in six months, and the European Commission is already taking steps to simplify the use of such services in different EU member states.

"The first half of 2017 showed incredible results for the music industry. The rapid spread of streaming platforms among consumers has led to the spread of music on a scale that we have not seen before." So Dave Bakula, Senior Vice President, Music Market Analysis, Nielsen, described the company's semi-annual report on the American market’s state. According to Nielsen, in the United States, a weekly streaming audition reached 7 billion in March this year, and it was already 7.5 billion by the middle of this year.

As streaming audio is growing rapidly, other forms of music consumption in the recording are losing their ground. Sales of digital albums amounted to 35.1 million in the first half of the year, which is 19.9% less than in the same period last year. Digital sales of individual tracks amounted to 307.1 million units, which is 24% less than a year ago. The physical sales segment has traditionally recorded a weaker performance - 46.9 million albums were sold in the US in the first half of the year, which is 17% less than a year ago.

The growing popularity of audio streaming services is also beneficial for performers. According to Forbes, the total revenue of musicians from the Forbes Celebrity 100 rating from streaming their works this year doubled from $ 177 million last year to $ 387 million in the current.

Canadian rapper Drake and his latest album More Life hit a record in the American audio streaming segment in 2017. By the end of June, the album’s number of streams reached 385 million. The previous record for the United States was delivered by the same Drake and his album Views, released in April 2016 (245 million streams). The rap artist’s popularity is also remarkable as the style of R & B / hip-hop in the US outscored the traditional leader - rock music - for the first time during the observation of the music market by Nielsen. The total share of sales and listenings of R & B / hip-hop songs (streaming, downloading, physical albums) was 25.1% out of all genres, while the figures of the rock style reached only 23%. Pop music occupies the third place (13.4%). The top ten genres also include country music - 8%, Latin American music - 5.7%, electronic/dance - 4%, Christian/gospel - 2.5%, music for children - 1.4%, jazz - 1 %, classics - 1%.

The rapid growth of the popularity of music streaming is typical not only for the United States. According to the British Recording Industry Association (BPI), in the first half of 2017, the number of streams on the albums increased by 53% compared to the same period last year - 31.8 billion. This show that the last year's trend, when in 2016 the number of streaming auditions of albums increased by 67.5% by 2015.

The volume of digital sales of albums is also declining. According to the results of the first half of the year, the decline in Great Britain was 24.1%, while the digital sales of individual tracks fell down by 23.5%. However, the situation with the physical sales of music is somewhat different from the American one: CD sales declined by 6.4%, but album sales on vinyl grew by 32.2%, and sales of vinyl singles grew by 60.2% - which once again confirms that the interest in vinyl is reviving. 

The growing popularity of streaming services seized attention of European regulators who are already trying to simplify and improve the work of this market in the EU. Back in February, the European Commission adopted new rules that will allow Europeans to use their digital subscriptions to music, video, games and other content even when they are in another EU country. As part of the overall strategy of the single digital market, which has already led to abolition of mobile roaming between EU countries, companies such as Spotify or Netflix will develop technical solutions for the EU that will verify in which EU country a European user of such services is. Even if a user who is a citizen of an EU country is in another EU country, he will have the opportunity to continue using his subscription. Vice President of the European Commission Andrus Ansip, responsible for the strategy of the single digital market, noted that "this agreement will give Europeans a very concrete advantage. Those who have already subscribed to view or listen to video or audio in their country of residence will be able to enjoy them when traveling to other EU countries. This is a very important step in overcoming barriers in the framework of our strategy for a single digital market".