Do you have digital music on your computer right now? Have you downloaded an MP3, listened to music that streamed to your computer, or watched a video on YouTube? If so, then you’ve contributed in some way to the online music industry at some point in time.
Online Music Industry Facts and Statisitcs
Digital channels accounted for 39% of the total industry revenues received in 2013.
What most people don’t realize is how little a musician tends to receive from the portion of a purchase of online music. For a represented artist, just 10% is the average in royalties that is received. That means from a $0.99 MP3 sale on a website like iTunes, the artist receives just $0.09 of that revenue. Independent artists make much more per sale, but often experience fewer overall sales.
Three Key Considerations About the Online Music Industry
1. Digital online streaming of music has become more popular, but the average artist receives just $0.001 per airplay in royalties.
2. 55% of online streaming users have used that platform to find new artists on a global scale.
3. The average market penetration rate for online streaming services is 32% of the population. In Norway, it’s 48%.
Takeaway: There has been a large emphasis placed on the removal of music piracy and online streaming that is free or low-cost seems to be the solution to that problem. Artists still get a chance to make some in royalties, though admittedly extremely small, while gaining the chance for more exposure to new markets. Online streaming has, in fact, cut into overall MP3 sales, but revenues within the online music have remained consistent. This means people still want music, but are willing to look at new mediums to hear that music.
Other Facts to Consider About the Online Music Industry
1. Even though sales are stable throughout much of the world, online music sales fell over 16% in Japan in the last year.
2. Just 2% of the revenues received in this industry came from synchronization, or the usage of online music in television and/or movies.
3. Global digital revenues in the United States were $5.9 billion, a 4.3% increase over the previous 12 months.
4. Online streaming of digital music saw a 51.3% increase in usage in the last 12 months, with 54% of users being male.
5. 28 million users had a paid online music streaming service in the last 12 months, a 40% increase over the year before. Only 8 million people had a similar subscription in 2010.
6. Vevo, an online video music streaming service, had 5.5 billion hits in December 2013 with over 243 million unique visitors.
7. MP3 downloads account for 67% of the total industry revenues.
Takeaway: There’s no doubt about the fact that this industry is changing as the general population’s tastes and preferences change. If the online music industry can continue to adapt, there will always be a place for someone to make music, make a profit from that music, and change the world in some little way. Will these increases in revenues continue in 2014? How will subscription services influence the industry in the next 12 months? Only time will tell.
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