Concerns In Music Streaming For 2020








2020 has been a difficult year for most industries. For the music world has been just as challenging. For some it has been a brutal year with the restrictions on traveling and the gathering of people. A musician can see these restrictions as a means of taking away their performances and for many this is a huge chunk of what they make from their music. For the labels, they have felt a bitter sting in music streaming as it has dipped across the boards by more than 20% usage.


To put this into perspective, you have to understand that like the movie industry, music is dual in marketing, sales, and how it is presented to the world. As long as people want to see their musicians perform and have the closeness that is provided in a concert there will always be a desire for concerts, festivals, and other live events for musicians. What the COVID-19 pandemic has done is take this physical experience away. The need is still there, but the means of delivering to the fans is not.


Much of the music industry income for the labels and the bands come from two base avenues. This has been the case since the 1950's. Labels usually make their money from merchandise sales and physical album sales. The musicians make the larger sum of their sales from touring. In the 1990's and early 2000's there were a ton of bands that wanted to tour Europe and their labels wanted them to tour North America. The main reason for the bands was that cities were close which meant less travel and more concerts. At the time, labels wanted musicians in North America as they were more prone to purchasing tour merchandise and albums at the concerts.


The virtual revolution where the Internet exploded into a commercial monster changed the physical aspect for many labels. They adapted to digital releases and streaming as new avenues for revenue. There is still physical sales and this will always be a factor as long as bands continue to tour and there is that physical element involved.


What has changed that it has seen music streaming drop by over 20%? People are stuck more at home, some are working from home and others are finding new avenues to survive the various types of lock downs that they are still dealing with. If anything most people would think that streaming would be booming. The music industry expected to see a spike in streaming, but that isn't the case.


The X-Factor for labels and digital distributors are the musicians themselves. As mentioned above, they are now missing out on a large part of their revenue. Some of the musicians are just sitting back and waiting for things to normalize, but many are finding new ways to generate the revenue they are missing from not touring, performing at festivals, and the loss of their part of the revenue from merchandising sold during tours.


As musicians are seeking to replace their lost revenue they are seeking new ways to get it in the virtual world. Most under contract can't create new revenue through streaming site (as this is the playground of their labels and digital distributors), so they are seeking ways to perform their music or to stream with direct interaction with their fans. For many of these musicians they have seen impressive results through these new avenues and have create good revenue methods through trial and error.


Now how does this impact the music streaming? Most people would prefer to have that closeness with their favorite musicians. This is where the musicians are actually drawing the traffic from the music streaming services. For the musicians to counteract the loss from not touring it is taking a bite out of the labels and the digital distributors common methods of making money.

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Update For The Start Of February 2020