Music Business

Share Of Revenue Music Streamers Paid Licensing Orgs Fell 27% In 2016, Says New Study

arrows upWhat a stream is worth will be debated forever, but one place to start is to ask what revenue it generates. A new study says that monetization is fast approaching $100 per 1000 streaming hours. At the same time, however, payments to creators as a percentage of growing ad and subscription revenue, is falling. 

Music streaming revenue jumped  $56.% in 2016.  Subscription revenue grew 93% and captured 61.9% of market revenue (U.S.) in 2016, while ad billings ramped 19.5%, to $1.7 billion. 

So, what is a stream worth?

Spotify New $Research and Markets has released a new study,"Internet Music Programmers 2016 – 2018: Ad-Supported and Subscription Listening Hours Chart a Monetization Groove," that shows each 1,000 hours of listening across the spectrum of music services is forecast to generate $100 by the end of 2018. 

Revenue may be growing, but the percentage of it passed on to creators is dropping. An estimated 34.8% of total streaming music service revenues went to licensing organizations in 2016, compared to 47.8% in 2015. That's a decline of 27%.

The prime culprits? Pandora captured an estimated 47.3% of the U.S. market listening, and Spotify 11.5%.

Ad Supported Is 61% Of Listening, But Generates Just 38% Of Revenue

Ad-supported music services generate 61% of total listening hours; and that segment of the market contributed some 38.1% of revenue. Revenue is expected to rise past 40% in 2018.

Pandora-new-logo-image-001The sector is forecast to top $5.4 billion in revenue in 2017, an 18.2% increase following an impressive 2016 surge.  

Advertising (all format executions, including in-stream audio, video and display) are projected to bill approximately $2.1 billion in 2017. Subscription services (including hybrid ad-supported and subscription operations and SiriusXM online sub revenues) are forecast to deliver $3.3 billion in 2017 receipts.



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