Streaming Music Will Dominate Downloads in 2012 (and Beyond)

By: Josh Wolford - August 17, 2012

According to a forecast from Strategy Analytics, this year is shaping up to be all about Spotify and less about iTunes. That’s because streaming music services (like Spotify, Pandora, and Rdio) are set to dwarf download services when it comes to revenues in the year 2012.

According to the Global Record Music forecast, streaming revenues will increase 40% this year. Download revenues are only set to increase by 8.5%. Basically, Spotify and Pandora are currently about five-times as profitable as iTunes and Google Play (percentage-wise, of course).

“Although downloads still account for nearly 80 per cent of online music revenues, this market is maturing and spending is flattening in all key territories. Streaming music services such as Spotify and Pandora will be the key growth drivers over the next five years as usage and spending grow rapidly,” says Strategy Analytics’ Ed Barton.

Streaming music revenues 2012

Streaming is going to crush downloads over the next few years, but when you team them up they still fall short of packaged sales. Overall digital sales are set to increase 17.8% to $8.6 billion, but still only hold a global share of 39%.

But Strategy Analytics predicts that will all change in 2015, when digital finally overtakes physical.

When streaming services were in their infancy, they just couldn’t compete with the likes of iTunes in terms of selection. It’s not that people feel they have to own their music, they just want to have access to everything they want to hear whenever they want to hear it. As services like Spotify are better able to provide that for $6-10 a month, people are naturally seeing the benefit in forgoing the $0.99 download.

[h/t The Verge]
Josh Wolford

About the Author

Josh WolfordJosh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf

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  • Tommy Corman

    It’s a strange phenomenon really. I see 4 sides to this:
    1. It’s great for consumers who purchase a lot of music cause now they can save money
    2. It’s bad for artists looking to make money off of their music through sales
    3. It’s good for artists looking to promote themselves
    4. It’s bad for broke people who are essentially giving themselves another bill to pay each month

    Either way any musician out there should understand the importance of being listed within these services. I know, as far as musicians go, ADEDistribution is the cheapest and easiest to work with in terms of getting placement into these stores.