The Impact of Media Streaming and Downloading

There’s no doubt that audio and video streaming has increased significantly within the past few years. Globally, the recorded music market alone grew by 6 percent in 2016, according to IFPI’s Global Music Report.

Much of this growth can be attributed to streaming, which saw a 60 percent increase in revenue, and now accounts for more than half of the revenue streams within the recording industry.

According to Nielsen, music consumption levels are at an all-time high and have been fueled by a 76 percent increase in on-demand audio streaming services such as Spotify, Pandora and Apple Music.

For the film/TV industry, a market study conducted by Statista found that online video consumption is one of the most popular internet activities globally, and digital video viewers in the U.S. is projected to reach more than 232 million by 2020.

While content streaming rates have skyrocketed, piracy and illegal downloading have not stopped growing. According to Robert Steele, President and COO at Rightscorp, file-sharing in North America has grown in the U.S. by more than 40 percent since 2008. This contradicts the common belief in the “streaming effect,” which is that as streaming services such as Spotify and Netflix are growing, viewers are downloading less frequently.

“The illegal downloading in the music industry has definitely hurt the music industry because people decreased the amount of money they would spend on music when they could get it for free,” Matt Hurewitz, president of Hurewitz And Company said. “And a new generation was growing up with a different value associated with music, ‘Oh, music should be free,’ and so the recording artists and the people in the music industry are making less money than they used to.”

As a result, fewer music clients are looking to hire auditors than they used to, Hurewitz said. While the top music earners still rely on auditors to do their audits, there are not as many as previously.

“I don’t know if that’s going to change anytime in the near future,” Hurewitz said. “There are streaming services, which are legitimate pay models, where people are paying for subscriptions or advertising revenue-generated. It’s just the amounts from those services that go to those recording artists aren’t paying a lot, so I don’t know whether or not the music industry is going to rebound to where it was. I think it’s rebounding now.”

Hurewitz suggests that users at least pay for streaming subscriptions such as Spotify instead of listening as an advertisement revenue-supported user.

“For streams that users listen to, if they are a paid subscriber, that translates into an amount that goes to the artist that is three or four times greater than is they were an ad-supported user,” Hurewitz said. “I think everybody has to at least step up and pay that nine dollars a month in order to contribute to that value of music because the market hasn’t determined, I don’t think, a fair price for music.”

Spotify’s premium account costs $9.99 monthly and offers a discount for students and family plans.

“You pick a song, you press play, you get that song on demand for $9.99 a month—$100 a year,” Hurewitz said. “It’s crazy compared to when we used to buy one CD a week for 15 dollars.”