Music Industry

So Where Is All the Money from Streaming Going?

Yesterday I had a post that linked to an article that insisted that thanks to revenues from streaming, the record industry is no longer in decline and is actually experiencing an uptick.

Great, right? Sure. But where are these revenues actually going? Canadian Musician takes a look:

Record labels, music publishers, songwriters, and musicians; these folks are earning money from on-demand streaming services. Combined, they’re earning a lot of money from the likes of Spotify, Apple Music, Google Play Music, and Tidal. Do music’s rights holders feel they’re due more money? Of course. But the current numbers aren’t to be scoffed at and the real question is: where is the money going and is it fair? Depends who you ask, if you can ask them.

What is “a lot” of money? Let’s say $2.9 billion, the amount the music industry made globally from streaming in 2015, according to the IFPI, which represents the recording industry. That $2.9 billion was a 45.2 per cent increase in streaming revenue over 2014 and marked a turning point, making 2015 the first year that digital revenue surpassed physical. Even better, 2015 saw a 3.2 per cent year-over-year increase in global recorded music revenue after many years of decline, thanks almost entirely to streaming. That trend carried over to 2016, with all three major labels – Sony Music Entertainment, Warner Music Group, and Universal Music Group – reporting their first quarters ever of streaming being their biggest money maker. Sony earned around US$300 million globally between April and June 2016 from streaming. Warner earned an estimated US$181 million in the first three months of this year from streaming. During those same three months, Universal, the largest of the three majors, made US$351 million from streaming.

The IFPI’s 2016 Global Music Report painted an even rosier picture for the Canadian recorded music industry. The Canadian industry’s growth in 2015 was 8.3 per cent, more than double the global average. In 2015, paid subscription streaming revenues grew 151 per cent over the previous year to US$29.4 million, with ad-supported streaming adding another US$19.49 million. This year-over-year growth in Canadian streaming revenue surpassed the global average by a significant margin (though that is making up for lost time as Canada was a relative late comer to the on-demand streaming market). So why do musicians, songwriters, and music publishers seem so unhappy? It’s about how the money is divided.

Read on. This is important.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

Alan Cross has 37880 posts and counting. See all posts by Alan Cross

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