In the past, when downloads began to surpass CD sales, it signaled a sea-change in the music industry. Labels had to adapt or die in the face of the changing music industry. As technology evolves, its power to shape the entertainment industry has proven to be a force to be reckoned with. Downloading even helped to topple the Tower Records of yesteryear. Nowadays, instead of paying for downloads of single tracks and albums at the iTunes store, listeners are tuning in to streaming services like Spotify to get their music, and customers are willing to pay for it, too.
According to Warner Music Group, downloading is now a thing of the past, and the real money lies in streaming. The label’s streaming revenue surpassed download revenue for the first time, last quarter. Warner’s streaming income grew by 33% while its download revenue only grew by 7%, signifying what could be a permanent shift in the way consumers get their music.
To ensure listeners shell out for services, the big labels in the music industry are rumored to be pushing YouTube and Spotify to tighten the reins on their free music offerings. The bulk of the streaming revenue comes from subscription fees, so industry giants are looking to make their premium services as enticing as possible to extract those monthly subscription fees from users’ pockets.
Apple is keen to get in on the action, as it prepares its Beats Music service for a global relaunch next month. Beats is rumored to not offer much in the way of free streaming. It’s designed to be a subscription streaming service, competing with Spotify. Beats Music hasn’t released official price points yet, but it is looking to undercut the competition by allegedly putting the heat on record labels to nix licensing deals with Spotify and YouTube in favor of Apple.