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February 21, 2017 | Authored by: Kevin Cancilla

Music goes further digital as streaming and subscriptions rise

Musical artists have caught on to the fact that streaming music isn't going away, and it seems the entire industry has, too. In the beginning, performers simply signed contracts allowing their music to be placed on streaming services like Spotify and Pandora. Now, however, big-name artists are releasing new albums through streaming first. Big hits such as Beyonce's "Lemonade," Kanye West's "The Life of Pablo" and Radiohead's "A Moon Shaped Pool," all debuted exclusively on a streaming platform before becoming more widely available.

Most of these releases were limited to one platform - "Lemonade" and "Pablo" were initially exclusive to Tidal, for example. This forced consumers to weigh their love for an artist against a monthly subscription fee. Even if there were plans to spread these albums to other platforms at a later time, the official release dates were kept under wraps. Fans were left uncertain as to whether or not they'd be able to access this new music via the services they'd already subscribed to, forcing them to decide if their love for an artist was strong enough to sign up for a new service operating on a subscription business model.

"The ones that matter are the superstar artists, like the A++," David Bakula, Nielsen Entertainment's senior vice president of analytics, told USA Today. "If I'm a consumer and I'm already paying $9.99 a month to Apple, and Kanye comes and says, 'Hey, I'm doing an exclusive album on Tidal' - for some consumers, that's enough to get them to flip over to Tidal."

Exclusivity is nothing new in the world of over-the-top content - both Netflix and Hulu have shows that stream only on those platforms. Providing a wanted service customers can't get anywhere else is a solid method of attracting individuals to your service in the face of stiff competition.

Awards for streaming
It's not just performing artists who understand the power of streaming music service - even the Recording Academy has taken note. Last summer, the organization announced music released exclusively on a streaming platform will be eligible for consideration for the recent 59th Annual Grammy Awards.

There are some stipulations, however. The music must be on a platform that operates on a subscription billing system, so users posting music to SoundCloud's and YouTube's free options won't qualify. In addition, the subscription platform must provide music on demand with limited downloads and offer a full catalog of songs. Qualifying albums must also have an International Standard Recording Code.

Changes in music revenue
This announcement reflects  the increased influence of streaming music, not just on consumers but on revenues within the industry. According to the Recording Industry Association of America, profits from streaming overtook other forms of music consumption for the first time in 2015 and surpassed $2 billion. 

With so many people relying solely on their smartphone or tablet to consume media, one can only expect subscription-based streaming services to become more popular and have a wider cultural impact.

About Author

Kevin Cancilla

Kevin Cancilla

Kevin was a Head of Global Marketing at Vindicia. Kevin is an industry veteran with extensive experience in strategic marketing for enterprise software companies and SaaS-based businesses. His 15-plus-year track record includes developing integrated multi-channel marketing programs and partnerships that yield financial results, expand the customer base, increase market share, and build brand affinity. Prior to joining Vindicia, Kevin held senior marketing positions at STEALTHbits Technologies, Tripwire, Epicor, Baan, and Adobe Systems. He holds a BSBM degree in marketing and business management from the University of Phoenix.