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 Spotify and Beats Music. 210 million consumers worldwide use free streaming services, according to Mulligan, but only 37 million pay for streaming services.

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