The increase of music streaming revenue, which has been in double digits, is projected to slow down, according to Tatiana Cirisano of MIDiA Research, who spoke at the Music Biz conference. The company anticipates that it will slow down significantly, going from approximately 10% growth in 2024 to 3% growth in 2029.
Cirisano brought attention to the fierce battle for consumer attention, particularly in light of the fact that in-person activities are experiencing a surge in popularity following the epidemic. As the age of “build it and they will come” draws to a close, she underlined how important it is for content providers to present users with compelling reasons to spend time on their platforms. She said this because the period of “build it and they will come” is coming to an end.
According to the findings of MIDiA Research, the amount of time spent consuming entertainment in the background is growing. In the second quarter of 2022, background consumption will account for 20.6 hours. Platforms like Peloton and TikTok, which include music but do not entirely focus on it as their primary focus, pose a threat to traditional streaming services like Spotify and Apple Music because of the competition they present.
The cultural capital of streaming services, which was formerly controlled by editorial playlists such as Rap Caviar, is dwindling. Sites such as TikTok encourage “lean-through” music consumption, which is characterized by young people actively creating, curating, and interacting with musical content. Young music fans have shown a desire to move away from static playlists and become more engaged with the music they listen to.
According to Mark Mulligan, the creator of MIDiA Research, this trend toward increased interactivity echoes a pattern that can be traced throughout history. Before there was recorded music, live bands were impacted by their audiences, and now that there is social media and technology, there is a reintroduction of that audience-band interaction into the music-listening experience. In this new environment, artists that actively interact with their following will be at an advantage.
According to another finding from MIDiA Research, the hyper-personalized algorithms used by streaming services and social networking sites split listenership, making it more difficult for superstars to make a big impact. However, these artists can still make money off of their fanbase by creating content and forming collaborations with other brands. Streaming platforms are separating themselves from one another by zeroing in on particular genres or audiences and specializing their content.
When looking to the future, the data collected by MIDiA predicts that the next generation of platforms will build three-sided marketplaces that function as self-contained virtuous loops. Audiences will consume music, some fans will actively produce utilizing the music, and an algorithm will distribute the music to new fans based on the amount of music consumed as well as the engagement of existing fans.