Music streaming service

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A music streaming service is a type of online streaming media service that focuses primarily on music, and sometimes other forms of digital audio content such as podcasts. These services are usually subscription-based services allowing users to stream digital copyright restricted songs on-demand from a centralized library provided by the service over the internet. Some services may offer free tiers with limitations, such as advertising and limits on use. They typically incorporate a recommender system to help users discover other songs they may enjoy based on their listening history and other factors, as well as the ability to create and share public playlists with other users. It may also include customized radio or social media platforms. [1]

Contents

Streaming services saw a significant pace of growth during the 2010s, overtaking digital downloading as the largest source of revenue in the United States music industry in 2015, [2] and accounting for a majority since 2016. [3] As a result of its ascendance, streaming services (along with streams of music-related content on video sharing platforms), were incorporated into the methodologies of major record charts; the "album-equivalent unit" was also developed as an alternative metric for the consumption of albums, to account for digital music and streaming. [4] It has also caused a cultural shift for consumers renting rather than buying music outright. [5]

Consumers moving away from traditional physical media towards streaming platforms attributed convenience, variety, and affordability as advantages. [6] On the contrary, streaming has been criticised by some artists for making them earn less from their music and artistry compared to physical formats. [7] [8]

History

Digital distribution of music began to achieve prominence in the late 1990s and early 2000s; MP3.com and PeopleSound were early forerunners to later services, offering the ability for musicians (including, especially, independent musicians) to upload and distribute their songs online in the MP3 format. [9] [10] [11] MP3.com later offered a service known as My.MP3.com, allowing users to rip and upload music from CDs they owned into a personal library they could stream via their accounts. The service was the subject of a lawsuit by Universal Music Group, which ruled that the service constituted the unauthorized distribution of their copyrighted sound recordings. [12] The lawsuit proved detrimental to the company; it was subsequently acquired by UMG's parent company Vivendi Universal, and later sold to CNET (which shut down its music distribution platform). [9] [11]

Winamp developed by Justin Frankel and Dmitry Boldyrev in 1997 was a media player that could use online radio & video transmission. With this, it grew really popular fast with over 3 million downloads. With MP3 catching up it was very important for music distribution & it relied heavily on the users.

Music streaming using the Pandora Radio service Pandora.png
Music streaming using the Pandora Radio service

Pandora Radio launched in 2005; the service initially allowed users to create and listen to internet radio stations based on categories such as genres, which could then be personalized by giving "thumbs up" and "thumbs down" ratings to songs and artists the user liked or disliked. The service's recommendation engine, the Music Genome Project, analyzes and determines songs based on various traits. [13] [14] Pandora initially operated within the royalty framework enforced by SoundExchange for internet radio in the United States, resulting in operational limitations: [15] [16] users could not choose individual songs to play on-demand, and could only skip a limited number of songs per-hour (although users could later receive more skips by watching video advertisements). [17] [14] [18]

Spotify co-founder Daniel Ek in 2011. Cropped image of Daniel Ek.jpg
Spotify co-founder Daniel Ek in 2011.

The social networking service MySpace, [19] [20] [21] and later the video sharing platform YouTube, also became prominent outlets for streaming music, with the latter becoming particularly prominent for music videos. [22] In 2006, Swedish businessman Daniel Ek and Martin Lorentzon founded Spotify, which first launched in 2008; aiming to create a legal alternative to file sharing platforms such as Napster and Kazaa, the service allowed users to stream songs on-demand using peer-to-peer technology, and would be offered in subscription-based and ad-supported tiers. Ek stated that he wanted to "create a service that was better than piracy and at the same time compensates the music industry." [23] [24] In 2006, a French music streaming website known as Blogmusiq was shut down after copyright complaints by the local royalty agency SACEM. [25] After reaching agreements with SACEM, the site subsequently relaunched as Deezer, which reached seven million users by the end of 2009. [26] [25]

In the 2010s, online streaming gradually had begun to displace radio airplay as a significant factor in the commercial success of music. Spotify officially launched in the United States in 2011, [27] and in March 2012, Billboard added streaming services to the formula of its Hot 100 chart. Later that year, Psy's K-pop song "Gangnam Style" became a major international hit, driven primarily by the viral popularity of its music video; "Gangnam Style" would become the first YouTube video to reach one billion views. [22]

After Spotify's launch, competing services began to emerge in the North American market, including Beats Music—which was backed by headphone maker Beats Electronics, Microsoft Groove Music Pass (formerly Xbox Music), [28] Amazon Music Unlimited, [29] and Google Play Music All-Access (a branch of a service also offering downloads and a music locker). [30] [31] Beats Electronics was later acquired by Apple Inc., which discontinued Beats Music in 2015 and replaced it with a new Apple Music service. [32] [22] Tidal, a streaming service oriented towards high-fidelity audio, also emerged in 2015, with backing from rapper Jay-Z, and a focus on exclusive content. [33] [34]

In October 2015, after initially offering a subscription bundling Play Music All Access with ad-free viewing of music content on YouTube, [35] [36] Google launched YouTube Red— which extended ad-free access to all videos on the platform, and added premium original video content in an effort to compete with services such as Netflix. [32] Concurrently, YouTube introduced YouTube Music, an app dedicated to music content on the platform. [32] [37] In 2017, Pandora launched a "Premium" tier, which features an on-demand service more in line with its competitors, while still leveraging its existing recommendation engine and manual curation. [38] In October 2017, Microsoft announced the discontinuation of Groove Music Pass, and directed its users to Spotify. [39]

In 2018, YouTube Red rebranded as YouTube Premium, and YouTube concurrently introduced a redesigned YouTube Music platform, along with a separate YouTube Music subscription at a lower price point. The YouTube Music platform can be used without a subscription, but carries video advertising, and does not support background playback on mobile devices. [40] [41] The YouTube Music service eventually replaced Google Play Music entirely in 2020, and Google no longer operates a digital music store. [42] [43] [44]

In 2019, Beatport, an online music store primarily targeting DJs and electronic music, announced music streaming services known as Beatport Cloud and Beatport Link. The latter is designed to integrate directly with DJ software such as Serato, Rekordbox, Traktor, [45] [46] [47] [48] and its first-party web application Beatport DJ (which launched in 2021); the service targets professional DJs shifting to streaming-based models for their music libraries, as well as amateur DJs. [49] [48]

To increase the diversity and value of their services, music streaming services have sometimes produced or acquired other forms of music-related content besides songs, including music documentaries [50] and concert presentations. [51] [52] Spotify had begun to increasingly make investments into podcasts, buoyed by acquisitions such as sports publication The Ringer and exclusive rights to The Joe Rogan Experience . [53] [54] [55] [56]

Impact and figures

A smartphone docked on a speaker, streaming music from the Spotify service Alper Cugun Spotify.jpg
A smartphone docked on a speaker, streaming music from the Spotify service

By 2013, on-demand music streaming had begun to displace online music stores as the main revenue stream of digital music. [22] In March 2022, the International Federation of the Phonographic Industry (IFPI) reported that global wholesale revenue in the music industry had increased by US$4 billion year-over-year (YoY) in 2021—its largest increase in the past 20 years—with paid music streaming services accounting for $12.3 billion in revenue ($2.2 billion YoY), and ad-supported streaming $4.6 billion ($1.1 billion YoY). Revenue from music streaming services had more than doubled since 2017, and the estimated number of users of paid services exceeded 523 million. [57]

Music streaming services have faced criticism over the amount of royalties they distribute, including accusations that they do not fairly compensate musicians and songwriters. [58] [59] In 2013, Spotify stated that it paid artists an average of $0.007 per stream. Music Week editor Tim Ingham commented that while the figure may "initially seem alarming," he noted: "Unlike buying a CD or download, streaming is not a one-off payment. Hundreds of millions of streams of tracks are happening every day, which quickly multiplies the potential revenues on offer – and is a constant long-term source of income for artists." [60]

Billboard introduced a Streaming Songs chart in January 2013, which would be based on the viewership of videos containing songs on platforms such as YouTube, and streams on platforms such as Spotify. [22] [61] In 2014, the UK Singles Chart similarly changed its methodology to include streaming. [62] To account for digital streaming and the decline of album purchases, charts began to adopt a metric known as "album-equivalent units" (AEUs), which are based on purchases of the album, and how many times individual songs from the album have been purchased or streamed. [63] [64] In 2016, the German charts made a similar change, with metrics based on revenue (thus only paid streaming services count towards it). [65] [66]

In 2019, streaming services accounted for the majority of music revenue globally for the first time. [5]

See also

Related Research Articles

<span class="mw-page-title-main">Digital music store</span> Online retailer of audio files

A digital music store is a business that sells digital audio files of music recordings over the Internet. Customers gain ownership of a license to use the files, in contrast to a music streaming service, where they listen to recordings without gaining ownership. Customers pay either for each recording or on a subscription basis. Online music stores generally also offer partial streaming previews of songs, with some songs even available for full length listening. They typically show a picture of the album art or of the performer or band for each song. Some online music stores also sell recorded speech files, such as podcasts, and video files of movies.

Beatport is an American electronic music-oriented online music store owned by LiveStyle. The company is based in Denver, Los Angeles, and Berlin. Beatport is oriented primarily towards DJs, selling full songs as well as resources that can be used for remixes. It also operates a specialized music streaming service oriented towards DJs.

The open music model is an economic and technological framework for the recording industry based on research conducted at the Massachusetts Institute of Technology. It predicts that the playback of prerecorded music will be regarded as a service rather than as individually sold products, and that the only system for the digital distribution of music that will be viable against piracy is a subscription-based system supporting file sharing and free of digital rights management. The research also indicated that US$9 per month for unlimited use would be the market clearing price at that time, but recommended $5 per month as the long-term optimal price.

Pandora is a subscription-based music streaming service owned by the broadcasting corporation Sirius XM Holdings that is presently based in Oakland, California inside of the United States. The service carries a focus on recommendations based on the "Music Genome Project", which is a means of classifying individual songs by musical traits such as genres and shared instrumentation. The service originally launched in the consumer market as an internet radio service that would generate personalized channels based on these traits as well as specific tracks liked by the user; this service is available in an advertising-supported tier and additionally a subscription-based version. In 2017, the service launched Pandora Premium, which is an on-demand version of the service more in line with contemporary competitors.

TuneCore is a Brooklyn, New York–based digital music distribution, publishing and licensing service founded in 2006. TuneCore distributes music through online retailers such as iTunes, Deezer, Spotify, Amazon Music, Apple Music, Google Play, Tidal, Beatport and others.

Digital music stores sell copies of digital audio, for example in MP3 and WAV file formats. Unlike music streaming services, which typically charge a monthly subscription fee to stream digital audio, digital music stores download songs to the customer's hard disk drive of their device. The customer will have the copy of the song permanently on their disk, provided the track is not deleted by the customer, the disk does not get physically damaged, or suffers from being corrupted. Major examples of digital music stores include iTunes Store, Amazon Music, Bandcamp and 7digital.

Amazon Music is a music streaming platform and Digital music store operated by Amazon. As of January 2020, the service had 55 million subscribers.

Deezer is a French music streaming service founded in 2007. The company has been a subsidiary of Access Industries since 2016. Deezer is available via web and on various digital platforms, including Android, iOS, macOS and others.

Spotify is a Swedish audio streaming and media service provider founded on 23 April 2006 by Daniel Ek and Martin Lorentzon. It is one of the largest music streaming service providers, with over 615 million monthly active users, including 239 million paying subscribers, as of March 2024. Spotify is listed on the New York Stock Exchange in the form of American depositary receipts.

<span class="mw-page-title-main">SoundCloud</span> German audio streaming service

SoundCloud is a German audio streaming service owned and operated by SoundCloud Global Limited & Co. KG. The service enables its users to upload, promote, and share audio. Founded in 2007 by Alexander Ljung and Eric Wahlforss, SoundCloud is one of the largest music streaming services in the world and is available in 190 countries and territories. The service has more than 76 million active monthly users and over 200 million audio tracks as of November 2021. SoundCloud offers both free and paid memberships on the platform, available for mobile, desktop and Xbox devices. SoundCloud has evolved from a traditional online streaming platform to an entertainment company.

<span class="mw-page-title-main">Groove Music</span> Microsoft audio player software application

Groove Music is a discontinued audio player software application included with Windows 8, Windows 8.1, Windows 10 and Windows 11.

<span class="mw-page-title-main">Google Play Music</span> Online music locker and streaming service, 2011–2020

Google Play Music was a music and podcast streaming service and an online music locker operated by Google as part of its Google Play line of services. The service was announced on May 10, 2011; after a six-month, invitation-only beta period, it was publicly launched on November 16, 2011, and shut down in December 2020.

The following is a list of on-demand music streaming services. These services offer streaming of full-length content via the Internet as a part of their service, without the listener necessarily having to purchase a file for download. This type of service is somewhat similar to Internet radio. Many of these sites have advertising that supports free-to-listen options as well as paid subscription-based premium options.

YouTube Premium is a subscription service offered by the American video platform YouTube. The service provides ad-free access to content across the service, as well as access to premium YouTube Originals programming produced in collaboration with the site's creators, downloading videos and background playback of videos on mobile devices, and access to the music streaming service, YouTube Music. It has over 100 million subscribers.

Apple Music is an audio and video streaming service developed by Apple Inc. Users select music to stream to their device on-demand, or they can listen to existing playlists. The service also includes the sister internet radio stations Apple Music 1, Apple Music Hits, and Apple Music Country, which are broadcast live to over 200 countries 24 hours a day. The service was announced on June 8, 2015, and launched on June 30, 2015. New subscribers get a one-month free or six months free trial with the purchase of select products before the service requires a monthly subscription.

<span class="mw-page-title-main">Album-equivalent unit</span> Measurement unit in the music industry

The album-equivalent unit, or album equivalent, is a measurement unit in music industry to define the consumption of music that equals the purchase of one album copy. This consumption includes streaming and song downloads in addition to traditional album sales. The album-equivalent unit was introduced in the mid-2010s as an answer to the drop of album sales in the 21st century. Album sales more than halved from 1999 to 2009, declining from a $14.6 to $6.3 billion industry, partly due to cheap digitally downladed singles. For instance, the only albums that went platinum in the United States in 2014 were the Frozen soundtrack and Taylor Swift's 1989, whereas several artists' works had in 2013.

<span class="mw-page-title-main">YouTube Music</span> Music streaming service by YouTube

YouTube Music is a music streaming service developed by the American video platform YouTube, a subsidiary of Google. The service is designed with a user interface that allows users to explore songs and music videos on YouTube based on genres, playlists, and recommendations. In April 2023, the service expanded its offerings to include support for podcasts.

<span class="mw-page-title-main">DistroKid</span> American independent digital music service

DistroKid, formerly titled Fandalism, is an independent digital music distribution service, founded in 2013 by American entrepreneur Philip J. Kaplan. DistroKid principally offers musicians and other rights-holders the opportunity to distribute and sell or stream their music through online retailers such as iTunes/Apple Music, Spotify, Pandora, Amazon Music, YouTube Music, Tidal, Deezer, iHeartRadio and others.

Spotify, a music streaming company, has attracted significant criticism since its 2006 launch, mainly over artist compensation. Unlike physical sales or downloads, which pay artists a fixed price per song or album sold, Spotify pays royalties based on the artist's "market share"—the number of streams for their songs as a proportion of total songs streamed on the service. Spotify distributes approximately 70% of its total revenue to rights holders, who then pay artists based on their individual agreements. Multiple artists have criticised the policy, most notably Taylor Swift and Thom Yorke, who temporarily withdrew their music from the service.

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