Record Labels are cashing in on Streaming Services
While many remain dubious regarding revenue from streaming, a recent study from Music Business Worldwide shows that major record labels are actually pulling in roughly $9000 a minute from streaming services. This is a number that looks to be on the rise very soon.
For those that said that streaming revenue would never replace CDs there’s proof. According to a study done by Music Business Worldwide, the major labels made around $9000 every minute from streaming in the first quarter of 2017. To put it into perspective, that means $540,000 per hour and $12.5 million every day!
If this trajectory continues, it looks like the major record labels will make more than $5 billion this year from streaming alone, and that’s not even counting the indies.
As a comparison, streaming only brought in $2.9 billion last year, according to the annual IFPI Global Music Report.
Do the Math
There are only a little over 100 million paying streaming customers worldwide at the moment, so there’s plenty of room for growth. People love music, and they’re more willing to pay for it on a regular subscription basis.
With the possibility of Pandora being absorbed by Sirius XM and the waning of YouTube as a free music source, coupled with the ascension of Amazon Music and the constant user gains by both Spotify and Apple Music, the situation looks better and better for the recorded music industry.
Of course, the biggest issue here is how much of that revenue actually trickles down to the artist and songwriter, many who have been left out of the party for the most part (so what else is new).
One major issue to keep in mind is that you have to shift your way of thinking in the streaming age when it comes to numbers. 1 million streams or views is not equivalent to the same number of sales. In fact, a million of anything barely gets you in the game today. Labels begin to notice when you hit 10 million, and what’s considered a minor hit comes at 50 million. A true hit is in the hundreds of millions streams or views. In this global digital world, the numbers have changed. We have to erase the old “sales thinking” from our minds; in order to actually get a handle on what those true numbers mean. One thing’s for sure though, the revenue won’t likely stay at $9000 every minute for very long.