The music business is booming again after nearly two decades of decline, thanks to paid streaming services Spotify and Apple Music, according to a report from the Recording Industry Association of America.
U.S. spending on music surged 17 percent to almost $4 billion in the first half of 2017, the RIAA said Wednesday. Streaming grew 48 percent, more than offsetting steep declines in online sales and more moderate decline in CD purchases, with consumers snapping up new works from Kendrick Lamar and Ed Sheeran, the two top artists of the first half.
The U.S. music industry — led by label owners including Sony Corp., Vivendi SA’s Universal Music and Warner Music Group — is poised to deliver its third straight year of growth, a first since the 1990s. That’s boosted the value of record labels and music publishers, convinced the world’s largest technology companies to invest more in music and led to a flurry of transactions for financiers eager to take part in the boom.
Record industry executives have cautioned against celebrating prematurely since sales are still a fraction of what they were at the peak of CD sales. Revenue from advertising-supported streaming on YouTube and Spotify is still minuscule, which the RIAA deems the “value gap.” While sales from paid subscriptions increased by at least $650 million, total revenue from ad-supported streaming amounted to just a fraction of that gain.
“Primarily owing to growth in paid subscriptions, the industry continued to recover, though at levels still far below the peak of the late 1990s,” Josh Friedlander, the RIAA’s senior vice president of strategic data analysis, said in the report.
Spotify and Apple Music have converted millions of people who bought singles and listened for free into paying subscribers. More than 30 million people in the U.S. paid for a music subscription, more than triple the sum in 2015.
Streaming accounted for 62 percent of total industry sales in the first half, which gives the dominant players, Spotify, Apple and YouTube, tremendous leverage with their label partners.
In the music streaming era, access to data is king. Artists want to know how their music is being discovered, who’s listening, where, how many have streamed their release and what else their fans are into, among other things. Spotify is releasing an app for artists that aims to answer these questions, while also giving artists a way to update their profile and connect with listeners while on the go.
Essentially, this new “Spotify for Artists” app, as it’s called, is a mobile version of Spotify’s artist dashboard, which exited beta earlier this year. The key difference is the convenience of mobile access something Spotify product manager, Miles Lennon, says was a top demand.
“ The first thing we’re trying to achieve is meeting the artists’ needs to have mobility,” he says. “They don’t have desk jobs. While we have a desktop product, it’s not accessible to them.”
Like the web dashboard, the app lets artists update their profile on the service, including things like their bio, their artist’s pick and their playlists. These picks and playlists are one of the ways artists on Spotify engage fans — by telling them what favorite new song they’re listening to, for example, or by featuring their favorite tracks.
The ability to upload new photos to the artist profile is not yet supported, but will be in a future release of the app, we’re told.
However, the key features in the Spotify for Artists app have to do with gaining native mobile access to streaming data, including real-time data on new releases.
As soon as a new release drops, the app will update instantly as the track gets streamed. This will continue for the first week after a new single, EP or album is released, says Spotify.
This feature is exclusive to mobile and leverages Google’s Cloud infrastructure, explains Lennon. The one-week time frame was chosen partly because of the challenges of scaling such a feature, but also because it’s the most critical period to track. However, that time frame may expand in the future.
Data like this is crucial for artists, who today compete for fan attention and acclaim on number of streams, not album sales. And on Spotify, half of users discover music by way of playlists or the radio, the company has said before. So if a new release drops but isn’t picking up steam, artists will know this information immediately, then can act accordingly — getting their tracks on the right Spotify playlists, or getting other artists to feature their music on their own profiles, for instance.