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The music industry is facing a "fragile recovery" at the hands of popular streaming services like Apple Music and Spotify, according to new data collected by the Recording Industry Association of America (via Bloomberg). In total, the music industry in the United States is on track to grow for the second year in a row, which would mark "the first back-to-back growth since 1998-1999."

RIAA's data showed that streaming revenue in the U.S. grew 57 percent in the first half of 2016, reaching $1.6 billion, and accounted for almost half of industry sales, while subscriptions totaled $1.01 billion. Altogether, the industry grew 8.1 percent to $3.4 billion in the first half of 2016, which is on track to best the $7 billion yearly average of the last six years.

music-streaming-stats-800x361.jpg

Apple Music and Spotify remain the biggest forces in the streaming market, and a few label executives noted that "most of the users for Apple Music are people new to paying music, not former Spotify customers." At the last recorded subscriber count, Spotify had 40 million paid subscribers worldwide, while Apple music had 17 million.
Nor is this the first time new technology has come along to get people to pay online. Apple Inc. co-founder Steve Jobs convinced record labels that iTunes would save the industry from piracy, only to vaporize album sales by selling singles instead.

Yet Apple is no longer the only player in the market for digital music. Spotify operates a larger paid subscription service and has showed no signs of slowing down since Apple Music began competing in that market. Most of the users for Apple Music are people new to paying music, not former Spotify customers, according to label executives.
Understandably, retail spending on physical media isn't accounting for any of the overall industry growth. Physical music sales dropped 14 percent in RIAA's data of the first half of 2016, while paid downloads -- like those offered in the traditional iTunes store -- "also shrank by a double digit percentage." Free streaming grew 24 percent in the same data, to $195 million, but "those services aren't doing enough to convince people to pay for music," nor are they making enough money off free users to continue staying afloat.

That could potentially be why popular free music platforms, like Pandora, are gearing up to introduce new paid listening tiers for users. Amazon is planning to do the same, and both services are predicted to match Apple Music's $9.99 per month cost, while offering similar on-demand singles, albums, radio, and playlists for listeners.

Article Link: Apple Music Attracting New Streaming Subscribers to Aid in Music Industry's 'Fragile Recovery'
 
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mlody

macrumors 65816
Nov 11, 2012
1,150
761
Windy City
Between Amazon Prime Music and free services like di.fm, I am all set with my music needs for time being and do not anticipate to spend even a penny on music in the near future.
 
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bpeeps

macrumors 68040
May 6, 2011
3,387
3,585
most of the users for Apple Music are people new to paying music, not former Spotify customers
I know AM gets a lot of crap for UI, but I'm sure they've converted a lot of people to paying customers through ease of use and ubiquity. Never thought I'd see the day where I paid for music, but here we are.
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Between Amazon Prime Music and free services like di.fm, I am all set with my music needs for time being and do not anticipate to spend even a penny on music in the near future.
Ah yes, Amazon Prime where most of the music I want to listen to is unavailable or only a 10 second sample can be played.
 
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Dreamer2go

macrumors 6502a
Jun 23, 2007
669
279
I gave Apple Music a try again after the initial free 3 month subscription period. I think they are hitting the sweet spot.
Curated playlist is way better than what Spotify is offering me...

The only issue is... iCloud Music Library... it messes up my base library (iTunes on my MBP).

Other than that, I think I'm going to continue using Apple Music, and cancelling my Spotify subscription very soon.
 
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melgross

macrumors 6502
Jan 23, 2004
370
269
New York City
Of course, both Pandora and Spotify are losing a lot of money each year. Considering the financial situation of their costs, which don't go down the more subscribers they get, they will just be losing even more money.

I've been saying for some time now, that in the long run, the only companies that will survive in the retail music market are Apple, Amazon, Google and possibly Facebook, if they're interested, and also, possibly, Microsoft.

There has never been a successful music streaming company since the very beginning back around the year 2000. The only way it works is if there's a parent company that absorbs the costs out of other profit centers, because it believes that it benefits those other profit centers in their own sales and profits.

So those companies I mentioned can easily afford the several hundred million a year in losses both Pandora and Spotify are suffering. But neither Pandora nor Spotify can, in the long run.
 
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navaira

macrumors 68040
May 28, 2015
3,815
5,027
Amsterdam, Netherlands
Yup. Apple, Google, Amazon and possibly FB one day have tons of money to burn and take over the market. It's a luxury that Pandora or Spotify can't afford. I did notice that introduction of Apple Music put fire under collective asses of Spotify developers – all the niggles I had disappeared except two, it won't start playing music when inserting headphones like all other players (because it takes waaay too long to open) and the Android widget is crashed 95% of the time.

The same plea again – Eddy, make me choose Apple Music because it's the best, not because it's preinstalled on computers and phones.
 
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2457282

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Dec 6, 2012
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The fact that almost half of the industry revenue is coming from streaming is, I believe, the reason why support for downloading music has almost disappeared from iTunes.
 
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devsfan1830

macrumors regular
Aug 26, 2011
153
105
VA
I just wish the movie industry would follow suit. All movie access for a fee. $25 a month for all movies, anytime.

To a degree we already have that between Amazon and Netflix. If you want to include new releases, that's just unsustainable. The budgets for movies alone easily eclipse the music industry. Also, in my personal opinion, movies are still far better in a properly equipped theater. A home system will not match IMAX and the surround audio those offer. I still very much prefer to catch big films in theater first and buy a copy for home. I would however, be all for them finally just getting rid of DRM or have that DRM "unlock" after a certain period when movies end up in bargain bins. There's no reason to stop the piracy at that point when movies only cost a few bucks. They could even go the route of Apples "DRM free" music and embed and identifier in the file to track down illegal distribution. I just want to be able to watch a movie on my TV w/o needing to buy certain devices (Apple TV, Xbox). Id love 1 file, any device, non-streaming. This is why I'll continue to support Bluray and eventually 4K Bluray.
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The fact that almost half of the industry revenue is coming from streaming is, I believe, the reason why support for downloading music has almost disappeared from iTunes.
The idea that iTunes is moving away from standard purchases has been refuted before. In fact, aside from the added Apple Music layer, iTunes has not changed much at all.
 
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ApfelKuchen

macrumors 68040
Aug 28, 2012
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Quoting original article:
Nor is this the first time new technology has come along to get people to pay online. Apple Inc. co-founder Steve Jobs convinced record labels that iTunes would save the industry from piracy, only to vaporize album sales by selling singles instead.

Always different ways to spin things, but if I remember correctly, Apple's contribution to the industry back in the day was coming up with a viable method for selling music online. Arguably, free downloading/sharing of music would have vaporized album sales, regardless, had not Apple come up with a formula that allowed the record labels to accept web-based music sales.

The web has seriously damaged just about every method of physical distribution of media. At least, in the case of music, the retail price for a song or album download is not 50% or less than the price of the same item in physical format (the $10 ebook, which continues to be a totally unsupportable price, from the producer's perspective, for anything other than mass-market bestsellers).
 
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aajeevlin

macrumors 65816
Mar 25, 2010
1,210
540
Between Amazon Prime Music and free services like di.fm, I am all set with my music needs for time being and do not anticipate to spend even a penny on music in the near future.

If you are single, then prime music is not bad. Unfortunately you can't share with family. So that makes prime not as useful as the others.
 
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DoctaSfink

macrumors member
Sep 9, 2016
65
123
I have Amazon Prime music and it barely has anything I want. I've been trying out Apple Music and freaking love it. I'll probably start paying for it soon. It's a paltry sum for what you get, if you actually make use of it.
 
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2457282

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The idea that iTunes is moving away from standard purchases has been refuted before. In fact, aside from the added Apple Music layer, iTunes has not changed much at all.

Well from where I stand, the fact they they moved the stations behind the paywall making it difficult for me to discover music, is an important change. The fact that just about anything I want to do pops up some message about 3 month free trial is an important and annoying change. And since there is no itunes on the phone, just music which is totally biased towards streaming, I would say that is an important change. Other than that, sure, it hasn't changed at all.
 
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smacrumon

macrumors 68030
Jan 15, 2016
2,683
4,010
The Courage to Aid the Music Industry's 'Fragile Recovery'. Give me a break.

A dollar for every thousand streaming plays. What a disgrace.

The best way to support music is to get out and go see your favorite artists play.
 
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citysnaps

macrumors 604
Oct 10, 2011
7,177
12,298
San Francisco
I tired the 3 month Apple Music evaluation about a year ago. Was on the fence. And ultimately couldn't get into it.

Last week I signed up with a subscription wanting to try it out again with a newer Apple Music user interface. Much much better. Enjoying Apple Music a lot now.

$8.33 per month for a huge range of music works for me...
 
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thisisnotmyname

macrumors 68020
Oct 22, 2014
2,407
5,076
known but velocity indeterminate
I just wish the movie industry would follow suit. All movie access for a fee. $25 a month for all movies, anytime.

It would be quite a bit more than $25/month. If you provided me a service with access to all video based entertainment (movies/TV/cable series) past and current, on demand, commercial free, to any device I want, I'd easily pay $100/month for that, probably $200.
 
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marty1980

macrumors 6502a
Apr 22, 2011
605
436
While many people are happy about streaming media, I remain cautious about where everything is headed.

To start is bandwidth of the interwebs. Streaming eats a lot of bandwidth that is still a limited resource in most of the world. The more people stream, the more constraints we put on the network. You can argue it forces growth, but it also causes headaches for transition.

This data comes at a premium through most ISPs/Carriers. Data caps make sure that you can only stream as much as they want you to. The more you want to stream the more you have to pay.

Ownership of content is at risk. While anyone born after 1995 is probably comfortable with all their documents, data, music, photos, movies and whatnots "in the cloud" many of us older folk understand why ownership of your content matters. Streaming gives you temporary access to content that is not owned by you. Whenever you don't pay for the streaming service, you immediately lose the music you listen to. It guarantees that customers will always be back for another month because otherwise they have to find some other means to listen. If the industry were to move completely to streaming, nobody would be able to listen to their music without a subscription being paid to a company who has rights to stream.

For a long time, my data cap on my cellular made streaming a non-option. But that cap has significantly increased by itself over time and now I can stream for a time during each billing period without worrying about crazy overage fees. Now that I can though, I don't want to. I buy my music because I believe a purchased album means more to the artist than streaming only their most popular songs. Plus the sound quality of a CD (uncompressed audio file) can't be beat with streaming (yet). Plus there's something to get signed at a concert.

Streaming music is also now introducing "exclusive" music. It used to be anybody could by an "exclsuive" album from Goodies (or Target or Walmart or wherever). Now, "exclusive" means only subscribers of the exclusive provider are allowed to listen. That's a huge difference in who has access to new music.

I know I'm a minority of people who don't like the path streaming music has taken. This is the way the industry is moving and due to all the **** pirates out there, we aren't going back because this keeps the industry alive; the point of he article. I dread the day I start feeling the need to add $10/15 month bills to my plate because it becomes the only way to access new music.
 
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Johnny907

macrumors 65816
Sep 20, 2014
1,248
1,959
"Most of the users for Apple Music are people new to paying music, not former Spotify customers, according to label executives."

I'm sorry, but how would a label exec know this? Moreover, how would even Apple know this unless they are tracking and reporting app usage?
[doublepost=1474392736][/doublepost]
The best way to support music is to get out and go see your favorite artists play.

I can't remember the last time an artist I liked came to Alaska, so. I'd love to give them my money directly, but I'm not flying to Portland or Seattle just to do so.
 
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DoctaSfink

macrumors member
Sep 9, 2016
65
123
While many people are happy about streaming media, I remain cautious about where everything is headed.

To start is bandwidth of the interwebs. Streaming eats a lot of bandwidth that is still a limited resource in most of the world. The more people stream, the more constraints we put on the network. You can argue it forces growth, but it also causes headaches for transition.

This data comes at a premium through most ISPs/Carriers. Data caps make sure that you can only stream as much as they want you to. The more you want to stream the more you have to pay.

Ownership of content is at risk. While anyone born after 1995 is probably comfortable with all their documents, data, music, photos, movies and whatnots "in the cloud" many of us older folk understand why ownership of your content matters. Streaming gives you temporary access to content that is not owned by you. Whenever you don't pay for the streaming service, you immediately lose the music you listen to. It guarantees that customers will always be back for another month because otherwise they have to find some other means to listen. If the industry were to move completely to streaming, nobody would be able to listen to their music without a subscription being paid to a company who has rights to stream.

For a long time, my data cap on my cellular made streaming a non-option. But that cap has significantly increased by itself over time and now I can stream for a time during each billing period without worrying about crazy overage fees. Now that I can though, I don't want to. I buy my music because I believe a purchased album means more to the artist than streaming only their most popular songs. Plus the sound quality of a CD (uncompressed audio file) can't be beat with streaming (yet). Plus there's something to get signed at a concert.

Streaming music is also now introducing "exclusive" music. It used to be anybody could by an "exclsuive" album from Goodies (or Target or Walmart or wherever). Now, "exclusive" means only subscribers of the exclusive provider are allowed to listen. That's a huge difference in who has access to new music.

I know I'm a minority of people who don't like the path streaming music has taken. This is the way the industry is moving and due to all the **** pirates out there, we aren't going back because this keeps the industry alive; the point of he article. I dread the day I start feeling the need to add $10/15 month bills to my plate because it becomes the only way to access new music.

I almost never stream through Apple Music. I just download what I want on Wifi and listen to it whenever, wherever I want. If Apple Music was "streaming only," there is no way in hell I would be using it. I believe Spotify Premium follows this model as well as other streaming services. I don't spend enough on headphones to really notice a difference between Apple's AAC format and CD audio.

If I really like an artist, I will buy the physical media, because that's what I grew up doing.
 
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marty1980

macrumors 6502a
Apr 22, 2011
605
436
I almost never stream through Apple Music. I just download what I want on Wifi and listen to it whenever, wherever I want. If Apple Music was "streaming only," there is no way in hell I would be using it. I believe Spotify Premium follows this model as well as other streaming services. I don't spend enough on headphones to really notice a difference between Apple's AAC format and CD audio.

If I really like an artist, I will buy the physical media, because that's what I grew up doing.

This defeats the best opportunity streaming music brings to the table: Discovery.

By downloading on Wifi ahead of time, you have to know what you want to listen to before-hand. Which means you can't discover new music while out and about without going back to streaming.
 
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DoctaSfink

macrumors member
Sep 9, 2016
65
123
This defeats the best opportunity streaming music brings to the table: Discovery.

By downloading on Wifi ahead of time, you have to know what you want to listen to before-hand. Which means you can't discover new music while out and about without going back to streaming.

I guess. I do lots of discovering whenever I'm connected to Wifi. If I find something I like, I download it.
 
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Rigby

macrumors 603
Aug 5, 2008
5,555
9,243
San Jose, CA
"Most of the users for Apple Music are people new to paying music, not former Spotify customers, according to label executives."

I'm sorry, but how would a label exec know this? Moreover, how would even Apple know this unless they are tracking and reporting app usage?
They probably employ market research companies that poll representative groups of customers. It makes sense to me though, given that Apple Music hasn't put a dent in Spotify's subscriber growth (on the contrary).

The music industry really just confirms what Spotify has been saying all along: streaming is about to save the music industry, not to kill it like some claim. Now it's just a question of reaching critical mass.
 
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