The U.S. music industry has completely changed over the course of 10 years. Advances in technology have led to faster internet connections and more powerful devices; the perfect breeding grounds for digital music platforms. Those such as YouTube, Spotify, Apple Music, and Amazon Prime Music that enable users to download, play, and stream music.
The new level of convenience and accessibility has not been overlooked by consumers. They have embraced the reality that they no longer have to physically go to the store, find a CD, wait in line, and pay $10 to $20 for it. Instead, they can simply download a song or album online with a click of a button. Further, they can pay around $10 per month to stream all the albums they want.
Here’s a closer look at this shift and how you can build stunning digital products to serve the new music market.
The shift to digital music platforms
Back in 2008, U.S. digital music revenue totaled about $2.6 billion and was primarily generated from ringtones and ringbacks, album downloads, single downloads, and music video downloads. Then came 2011, when the subscription and streaming model caught on. Within three years, it surpassed all other sources of digital music revenue. (source)
By 2017, U.S. digital music revenue reached about $7 billion total, $5.7 billion coming from subscription and streaming revenue.
The big picture: All recorded music revenues
Recorded music revenues (both physical and digital) as a whole grew from an estimated retail value (ERV) of $6.7 billion in 2015 to $7.5 billion in 2016 to $8.7 billion in 2017.
The Recording Industry Association of America (RIAA) reports that this is the first time since 1999 that music revenues have increased significantly for two consecutive years. What is the main driving factor of this growth? You guessed it, music streaming subscriptions. They accounted for 34% of all U.S. music revenues in 2015, 51% in 2016, and 65% in 2017!
Revenues from digital downloads dropped by 25% in 2017. They accounted for $1.3 billion in revenue and 15% of the total music industry revenue. Further, revenues from physical products decreased by 4%, accounting for $1.5 billion in revenue and 17% of total revenue. Synchronization royalties also made a small appearance, attributing 3% of the industry’s revenue.
It’s interesting that physical products outperformed digital downloads as this is the first occurrence since 2011. However, it is the result of the steep 25% decrease in digital downloads. If consumers are going to purchase digital music, the subscription format offers more value. Many seem to agree as the only source of revenue showing sizeable growth is the one for streaming services.
Creating beautiful digital music platforms
With this drastic shift, comes the opportunity for businesses to provide listeners with the digital music platforms they want. At Brightscout, we create visually-appealing designs for a wide variety of product types, including music apps.
In this design, users can view the song title and artist in the upper left, the album on the upper right, the popularity on the bottom left, and the social signals on the bottom right. This allows users to analyze the popularity of each track. Additionally, they can save a song, add it to the playlist, share it with friends, love it, or follow the artist.
With so much competition in the space, it’s important to create a beautiful interface that is easy and enjoyable to navigate. One with a great design that helps users to get the most out of their music experience.
With competition growing and more users getting their music digitally, music companies will need to put innovation at the forefront of their brand. They will need to become more like a tech company, coming up with creative ways to engage users, provide interesting content, and deliver visually stunning user experiences.
Those that embrace technology will live and those that don’t will die. Just like the last major evolution from CDs to downloads.
Brightscout is an elite team composed of designers, technologists, and idea-makers. Our products help clients to gain a competitive edge in their industry through stunning designs, forward-thinking approaches, and the use of emerging and disruptive technologies. Contact us today with your idea, and we’ll create a custom solution for your company.