To the tune of 300%: streaming's big shiny year

Share

Canadians dove deeper into streaming music in 2016, signalling a growing public eagerness to pay for songs through services such as Spotify and Apple Music after two decades of the music industry's digital trial-and-error.

In Canada, streams on subscription services last year rose 309 per cent from 2015, according to analytics firm BuzzAngle Music. In its first-ever Canadian annual report, to be released this week, BuzzAngle – which uses data from sales and streams across an ever-growing number of music platforms to paint a holistic picture of listening habits – found that Canadians streamed tracks 36 billion times on demand last year. That's up 84 per cent over 2015, across audio services such as Spotify and Apple Music and video services such as YouTube.

The report offers an up-to-date Canadian view of the trend that listeners are abandoning download services like iTunes to get music and embracing streaming services full-tilt. According to BuzzAngle, Canadians streamed more songs on an average day – 98 million – than they downloaded from licensed services through the entirety of 2016, which totalled only 75 million.

Broken down by album-unit streams, BuzzAngle found Canadians consumed 8.5 per cent more music in 2016 than 2015. In the United States, it found overall consumption up more than 4 per cent per cent there. "We can safely say this is solid growth," said Jim Lidestri, chief executive of Border City Media, which runs BuzzAngle and first launched in 2013. As people flood into paid subscription services, he believes streaming might soon offset declines from dwindling sales. "That's good news for the profitability and for the health of the business," he said in a phone interview.

The music industry's many stakeholders have spent the past few years adjusting to this trend, for better or for worse. Warner Music Group Corp., for instance, announced last year that streaming had officially become its main source of revenue. The International Federation of the Phonographic Industry, a major-label lobby group, revealed last April that in 2015, streaming helped propel the first significant year-over-year revenue growth in recorded music in nearly two decades.

But the rapid growth in streaming does not mean the industry has recovered from its post-Napster-era losses. The IFPI said recorded music was a $15-billion (U.S.) industry in 2015, less than half its value in 2000; even while celebrating their revenue growth, they used the opportunity to chastise services such as YouTube to more proactively license music content.

Toronto-bred global superstar Drake was BuzzAngle's "artist of the year," with more than 656,000 "album consumption units" in 2016, the year that his fourth studio album Views and singles including One Dance were inescapable.

Music measurement is not a perfect science. BuzzAngle defines 150 streams as the equivalent of one song download, and 1,500 an album-sale equivalent – a rough, oft-debated industry-standard conversion of streaming apples to purchased oranges. Drake's Views, for instance, has 20 tracks, mucking up the math. "I believe there'll be more granularity in the formula in the future," Mr. Lidestri said.

Last year, BuzzAngle found combined digital and physical album sales fell 18 per cent year-over-year to 21 million. For the first time, its report says, digital-album sales fell faster – down 25 per cent – than physical sales, down 13 per cent.

Vinyl remained a physical-media growth story, with sales up 58 per cent versus a drop of 15 per cent for CDs. Still, vinyl's rebirth remains a niche. It only accounted for 5 per cent of all physical sales tracked by BuzzAngle, with more than two-thirds of its sales driven by rock and its sub-genres such as metal and alternative.

BuzzAngle is relatively new to Canada, but its data is gradually gaining fans among the country's music establishments. Last September it partnered with the Canadian Independent Music Association to launch an independent music sales and streaming chart here. And Exclaim Magazine, Canada's largest music and pop-culture magazine, recently turned to BuzzAngle to build its own charts.

Nielsen is also expected to publish a 2016 report soon. Its Soundscan system has long been music's standard-bearer for consumption measurement, but Mr. Lidestri wanted to collect more, and more granular data. Soundscan is "a good reporting tool for charts," he says, but he wanted to sell a product to help artists and their record companies make business decisions such as routing tours specifically where their music is popular.

Subscription streaming services such as Spotify, Tidal and Apple Music are becoming the go-to destination for music fans. They hit 100 million paying subscribers in December, according to digital music and media analyst Mark Mulligan. BuzzAngle, meanwhile, reported that these kinds of services accounted for 72 per cent of all audio streams in 2016.

Despite this demand, monetizing these subscription services has been a struggle – while large companies such as Apple can afford to take the loss, independent players like Spotify and Tidal have struggled to profit from the $10-a-month business model.