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Music Streaming Industry and Trend Analysis Essay

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Updated: May 22nd, 2021


The world music industry is going through a process of modernization and technological advancement. When the Internet popularity and the development of diverse programs and websites enable illegal music consumption known as piracy, there is a tendency in legal music usage observed worldwide. The newly introduced music streaming industry allows users to access the storages of recordings from their smartphones or other devices for an affordable payment.

Many platforms for streaming, with leading ones, such as Spotify, iTunes, and others, are compatible market players capable of causing shifts in the whole music industry. The technologies applied to the industry development enable consumption growth, guarantee industry revenues, and have a potential to occupy more significant market share in the future.

Industry Analysis

Technological advancement introduced to the industry of music production caused some consecutive shifts in the business. It “reduced the cost of producing, distributing, and even promoting recordings” (Benner and Waldfogel 129). The sphere is developing attracting large numbers of users who pay for access to the recordings library. Such an approach does not limit the consumers in the choice of the products and offers personalized recommendation procedure for the increase of consumption. According to the analytical data, streaming became “the single largest source of music industry revenues in the United States” in 2015 (Datta et al. 25). The current market size of the sector counts in millions of individuals and its expenditure is anticipated in the future.

The growth rate in the sector is observed in the example of the tendency to use streaming platforms. The advancement of the industry is closely related to the nature of music consumption. Music is described by Benner and Waldfogel as an “experience good,” which is the characteristic that indicates purchasing before usage (131). Also, the tendency to consume new music of less popular artists by the users emphasizes the need for the increase in the industry and the development of new labels, as well as new streaming platforms.

Nevertheless, the current state of the market advancement shows that the vast majority of consumption rates are occupied by active industry players. According to Datta et al., the USA music streaming industry is represented by such top platforms as Spotify and iTunes, “with market shares of 22.8% and 18.3%, respectively” (8).

Among the less popular platforms which constitute a class of less active market players working as the tools for CD and MP3 local listening, such as Winamp, with more than 12% of market share and Windows Media Player, with approximately 10% (Datta et al. 8). Regarding the growing tendency of streaming platforms for all types of devices for monthly payments from the users, there is expected an appearance of new market participants capable of competing with the major players.

Trend Analysis

The patterns in music production and consumption have shifted during the past several decades. Since the 1990-s, there have been two main participants in the production sphere of music that were competing and making revenue on music recording and releasing. They were “major” companies or labels that had a long history in the business and “independent” labels, that occupied less space in the industry but still were compatible (Benner and Waldfogel 129).

Major labels released high-promoted music by famous musicians for the mass market, whereas smaller independent companies concentrated on less popular and lower-costing releases. However, the pattern changed with the introduction of streaming to the music industry. This influential participant occupied a significant part of the field of business and established new rules of music, as well as film and literature, consumption (Data et al. 5).

The main characteristic of a change in music production consists in lowering the costs of releases and appearance of new independent labels in the market. Streaming gave them an opportunity to popularize the low-promoted musicians and gain revenue out of new technologies. Therefore, the change influenced the consumption of music, too.

The consumption of music is closely related to the trends in the industry and the technological advancement in the sphere. With the introduction of streaming to music, the consumption rates increased due to the shifts in the production sector. Since the number of new popular musicians appeared, there occurred a variety of products. Concentrating on the major singers, consumers, however, look for diversity in music, thus increasing the demand (Datta et al., 5-6).

With a specific pricing system of streaming where a higher payment is required for major artists, there is a tendency to the discovery of new music. Consumers tend to look for new tunes within the affordable range. According to the research conducted by Datta et al., there “long-run shift in music consumption toward more plays, variety, and new music discovery” is observed in the industry over the past decades (6). Thus, the active participation of streaming services in the market leads to a significant change in both, production and consumption of music.

As for the perspectives of the music streaming industry in the future, it shows a constant tendency to growth. From the technological point of view, streaming platforms designed for multiple devices and operating systems offer a personalized approach to music recommendations according to a user’s preferences and listening history (Datta et al. 7). It makes expenditure on new music consumption possible and increases the number of new releases. There are some perspectives in the introduction of new streaming platforms to the market which will attract more consumers and enlarge the market size. On the background of fighting against piracy in the music industry, the streaming systems are expected to regulate the illegal consumption of music and bring the sector to a global level of development.


In conclusion, the music streaming industry is a developing business that has originated during the last decades as an alternative to CD or MP3 recordings purchasing. The advancement in modern technologies caused a change in the sector of music releases, making independent labels compete with major ones. Such a shift caused the introduction of new music with lower production schemes to the industry and took the streaming sector to a new level.

The personalized approach to users’ activity recommendations concerning their preferences and history of listening allows the platforms (Spotify, iTunes, and others) to increase the volume of products and their revenues. The demand for new music forces independent labels to look for unique talents and introduce them to the business, which contributes to the growth of the music industry as a whole. Thus, the sector occupies a big part of the music business in the United States. It provides new opportunities for musicians and recording labels fighting against piracy as a crucial hazard to the market. Music streaming is a developing industry that shows the tendency to grow in the future.

Works Cited

Benner, Mary J., and Joel Waldfogel. “The Song Remains the Same? Technological Change and Positioning in the Recorded Music Industry.” Strategy Science, vol. 1, no. 3, 2016, pp. 129-147.

Datta, Hannes, et al. “Changing Their Tune: How Consumers’ Adoption of Online Streaming Affects Music Consumption and Discovery.” Marketing Science, vol. 37, no. 1, 2018, pp. 5-21.

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