2016 is half over and the trend of streaming music continues to rise. BuzzAngle Music, a firm that tracks US music consumption, reports nearly 210 billion streams so far this year. That’s up an impressive 58% to last year, but perhaps what’s more impressive is the growth’s leading contributor. For the first time ever in the US, audio, not video, is the preferred format for streaming music.
It seems logical that audio streaming would be more popular than video for listening to music, right? Maybe so, but that didn’t keep YouTube from being the most popular source for streaming music year after year. Video streaming still has a significant share of audiences with over 95 billion streams so far in 2016, but audio accounted for 54.6% of the market with over 114 billion.
Audio streaming is up 107% over last year
Music streaming sites like Spotify, Apple Music and Tidal don’t anticipate that kind of growth to continue, but there’s good reason to assume they’ll extend their lead over video.
Many listeners find audio streaming more practical. Audio streaming’s versatility with apps and mobile devices make it more convenient when on-the-go or working out than streaming a video. Also, streaming audio uses less data than video, making it a much more enticing option for listeners who aren’t connected to Wi-Fi.
What does this mean for the music industry?
Music sales have been have been declining for years as streaming has risen in popularity. In fact, the music business has lost billions thanks largely to streaming, but audio’s upsurge could help. Phys.org states that the music industry “earns far less from video sites.”
Spotify spends up to 70% of its revenue on royalties. With around 30 million monthly paying subscribers, that’s upwards of 210 million dollars in royalties – per month. And that’s just the paying subscribers. Spotify has nearly 90 million non-paying subscribers who are met with paid ads every time they listen.
What does this mean for us, the listeners?
Audio streaming sites may want to take advantage of their new place at the top and charge more for monthly subscriptions, but probably not. Subscribers are already paying almost double what analysts say users will pay for digital music per year.
What the trend really means is that video streaming sites will have to adapt. YouTube is already set to combat the surge of audio streaming with YouTube Red, a subscription service that will blend audio and video. The site offers ad-free music and video for subscription prices comparable to leading music streaming providers.
More competition in the streaming industry will likely lead to what competition usually leads to: better products and lower prices. Regardless of what sites users are listening on, that’s music to everyone’s ears.