January 21, 2020
Looking back at 2019, UK and Germany report record levels of streaming. Driving this is the incredible rate streaming is growing. A need to own music in physical or digital format is disappearing, which could cause concerns for artist revenues.
Streaming is smashing records globally, but in 2019 some countries achieved their own individual records. In figures released this month by BPI, 2019 was the first year that the UK surpassed 1 billion music streams. The same rapid growth is being reported by GFK Entertainment and BVMI in Germany as the country surpassed one billion streams. An interesting element to these record breaking numbers is that the growth is the rapid year on year. With a figure of 114 billion in the UK, the level of streaming has grown 26% since the previous year. The German streaming figure of 107 billion was an incredible increase of 34.5% on the 2018 figure.
These numbers would suggest that listeners need or desire to own the music they listen to less and less. Consumer music choices are shifting across both the digital and the physical formats. The decline of downloading in favour of streaming is stark. In the UK, the BPI reported a 26.8% decline in downloading music since 2018. In contrast, streaming saw a rapid 23.5% growth on the previous year.
Rising streaming figures also align with the global trend of choosing playlists over albums. Seasonality, specifically Christmas, was also cited in Germany to be a driver of streaming. Without the requirement to own a song, a consumer can be driven to stream a song by emotion, memory or event. Music ownership is not as flexible.
While there is a cultural and commercial resurgence in vinyl and cassettes, physical formats cannot compete with streaming. The UK saw a £400 million drop in spending on physical formats of entertainment. Streaming is growing in popularity with video streaming being the fastest growing. However despite these declines BVMI CEO, Florian Druck’s thoughts that physical music formats are not yet irrelevant, predicting vinyl to overtake CDs for the first time in decades. Nevertheless, with the extreme variance in growth between streaming and physical, it is unlikely to be a true rival.
Although these record figures and rises in music revenues present a favourable future for music, there are still concerns. BPI and Brit Awards Chief Executive Geoff Taylor caveats that there will not be a great benefit to the industry as a whole if digital platforms do not pay artists fairly. Consumer desire for access over ownership reduces artist income as revenues from streaming account for a fragment of that from album sales.
Echoing Mr Taylor’s words, there is little benefit when artists are not paid their due incomes. With streaming achieving record levels and rapid year on year growth, legacy systems will struggle on this mission. Talk to the Matching Engine team to learn about our application which autoscales to meet the demands of modern music matching.