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Here’s why Apple bought Beats: By 2019, streaming will account for 70 percent of digital music revenue

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Here’s another reminder why companies like Apple and Amazon are betting on streaming services: Streaming is quickly taking over as the major money-maker for the music industry, with 70 percent of all digital music revenue coming from streaming by 2019, according to an estimate from U.K.-based digital music analyst Mark Mulligan.

Mulligan’s MIDia Research took a closer look at the evolving role streaming is playing for the music industry in a new report titled The Streaming Effect, which also shows that streaming services are clearly eating into digital download sales. 23 percent of consumers who use music streaming services used to buy one album or more a month from digital download platforms like iTunes, but no longer do so. All told, digital download revenue is going to decline by 39 percent over the next five years, according to Mulligan.

However, most consumers still prefer free music streaming services to paid subscription plans like the ones offered by [company]Spotify[/company] and [company]Beats Music[/company]. 210 million consumers worldwide use free streaming services, according to Mulligan, but only 37 million pay for streaming services.

5 Responses to “Here’s why Apple bought Beats: By 2019, streaming will account for 70 percent of digital music revenue”

  1. Giancarlo

    I would gladly pay for a streaming service like Pandora, however its not available outside US. I suppose I’m not alone in this problem, so streaming still has a long way to overcome (unless targeting only to US market).

  2. Isitjustme

    I have news for the writer of the report, we love to hear what we like and streaming doesn’t give us that so how will we pay for service which doesn’t give us what we want.

    I still go back to listen to what I like that is the mp3s on my hard disk.

  3. I certainly enjoy listening to iTunes Radio, Spotify, Songza and Pandora because I can pick and choose from so much music. However, I don’t believe streaming radio will stop the average music lover from purchasing music. I don’t know the percentages but Apple should still make more money than most with a large-catalogue streaming service to serve up music and having a song purchase only one click away.

    Right now, I consider iTunes weak be because there’s no Like/Dislike icons, you can’t listen to whole albums and there doesn’t seem to be individual-curated playlists. Of all the services I’ve used only iTunes Radio simply stops playing music from time to time and needs to be restarted. Maybe it hangs when trying to load a commercial or something. I’m hoping that with Beats programmers and an unlimited amount of cash, Apple can come out with a very high-quality streaming solution even if it isn’t the best. If Beats could mate iTunes smart playlists with streaming music it would really make a very powerful front end for picking what you want to hear.

    I don’t understand iTunes Radio’s algorithms at all. I tell the station a number of group’s hit songs I want to hear but iTunes Radio doesn’t pay much attention to that at all and wanders all over the place with artists that aren’t even similar. I’m not asking for variety or discovery. The algorithms must be very slack or something. No matter, I’m still enjoying whatever I hear because it beats not having a streaming station at all. I just think Apple can do a lot better if it really tries.

  4. Daniel Harvey

    I don’t disagree with the very logical (and maybe obvious) argument. But that doesn’t get into why Beats vs. Deezer vs. Spotify, etc. Beats has *terrible* subscription and adoption numbers. What it does have is a popular brand, leadership talent, and a great app experience.

  5. adamacuo

    So the world’s most valuable company acquired a low quality maker of over-priced hardware so that it can be prepared for the shift that will suddenly take place in five years? Huh.