Music streaming services are a type of onlinestreaming media service that focuses primarily onmusic, and sometimes other forms ofdigital audio content such aspodcasts. These services are usually subscription-based services allowing users to streamdigital copyright restricted songson-demand from a centralized library provided by the service. Some services may offer free tiers with limitations, such asadvertising and limits on use. They typically incorporate arecommendation system to help users discover other songs they may enjoy based on their listening history and other factors, as well as the ability to create and share publicplaylists with other users.
Streaming services saw a significant pace of growth during the 2010s, overtakingonline music stores as the largest source of revenue to the United States music industry in 2015,[1] and accounting for a majority since 2016.[2] As a result of their ascendance, streaming services (as well as music-oriented content onvideo sharing platforms) were incorporated into the methodologies of majorrecord charts; the "album-equivalent unit" was developed as an alternative metric for the consumption of albums, to account for digital music and streaming.[3]
Consumers moving away from traditional physical media towards streaming platforms attributed convenience, variety, and affordability as advantages.[4] On the contrary, streaming has also been criticized for causing performers to earn less from their music and artistry compared to physical formats (which can be as low as one-tenth of a cent per stream).[5][6][7]
Digital distribution of music began to achieve prominence in the late 1990s and early 2000s, popularized by websites such asMP3.com andPeopleSound (which allowed musicians to publish tracks online for streaming, download, and/or purchase),[8][9][10] as well asfile sharing services such asNapster.[11]
In 1999, MP3.com launched "My.MP3.com", a feature which allowed users torip and upload music files from CDs they owned into a personal library via its "Beam-it" software, which they could then stream via their accounts.[12] In 2000, the service was the subject of a lawsuit byUniversal Music Group,UMG Recordings, Inc. v. MP3.com, Inc., which ultimately ruled that the service allowed for the unauthorized distribution ofcopyrighted sound recordings.[13] Although users were required to acknowledge that they owned the music, it was not practical to verify. The lawsuit proved detrimental to MP3.com: it would be sold to UMG's parent companyVivendi Universal in May 2001, and sold toCNET in November 2003, which shut down its music distribution platform in December 2003.[12][14]
In December 2001,Rhapsody was launched by the startup Listen.com, becoming the first service to offer subscription-based streaming access to a library of music online.[15] Initially limited to content from independent labels such asNaxos, it later reached agreements to stream music from the "big five" major labels.[16] In 2003,Roxio acquired both the online music storePressPlay and the intellectual property of Napster, and used their assets assets to launch "Napster 2.0"—an online music store and subscription music streaming platform.[17][18][19]
Pandora Radio launched in 2005; the service initially allowed users to create and listen tointernet radio stations based on categories such as genres, which could then be personalized by giving"thumbs up" and "thumbs down" ratings to songs and artists the user liked or disliked. The service's recommendation engine, theMusic Genome Project, analyzes and determines songs based on various traits.[20][21] Pandora initially operated within the royalty framework enforced bySoundExchange for internet radio in the United States, resulting in operational limitations:[22][23] users could not choose individual songs to play on-demand, and could only skip a limited number of songs per-hour (although users could later receive more skips by watching video advertisements).[24][21][25] In 2008, the company joined with other internet radio companies to protest proposed rate changes by SoundExchange.[26][27]
Yahoo! acquired Launch Media and itsLaunchCastinternet radio platform in 2001 amid thedot-com bubble;[28][29] in 2005, the service evolved intoYahoo Music Unlimited, a subscription service that allowed songs to be streamed inDRM-protectedWindows Media Audio (WMA), and purchased for an additional fee.[30][31]
Web 2.0 services led to new avenues for music streaming:YouTube would become a prominent platform formusic videos, and eventually displacedmusic television as their main distribution outlet.[32][33]MySpace allowed musicians to publish songs to stream on their respective pages, as well as interact andengage with their fans.[34][35][36]
In 2006, Swedish businessmanDaniel Ek andMartin Lorentzon foundedSpotify, which first launched in 2008; aiming to create a legal alternative tofile sharing platforms such asNapster andKazaa, the service allowed users to stream songs on-demand usingpeer-to-peer technology, and would be offered in subscription-based and ad-supported tiers. Ek stated that he wanted to "create a service that was better than piracy and at the same time compensates the music industry."[37][38]
In 2006, a French music streaming website known as Blogmusiq was shut down after copyright complaints by the local royalty agencySACEM.[39] After reaching agreements with SACEM, the site subsequently relaunched asDeezer, which reached seven million users by the end of 2009.[40][39]
MTV ownerViacom partnered withMicrosoft on an online music platform known asUrge, which included a music store, music videos and online radio stations, and a subscription music streaming service known as "Urge To Go". Urge was briefly integrated withWindows Media Player as a competitor toApple'siTunes andiTunes Store, but was discontinued in 2007 amidcannibalization by Microsoft'sZune platform (which was positioned as a competitor toiPod, and used its own separate DRM and music store that was incompatible with Urge). Viacom then entered into a partnership with Rhapsody ownerRealNetworks to form the joint venture Rhapsody America, and transition Urge subscribers to Rhapsody.[41][42] Yahoo Music Unlimited was discontinued in July 2008, and Yahoo also directed users to Rhapsody.[43][44]
In the 2010s, online streaming gradually had begun to displaceradio airplay as a significant factor in the commercial success of music. Spotify officially launched in the United States in 2011, andBillboard began to increasingly include streams into the methodologies of itsrecord charts.[45] In 2012,Psy'sK-pop song "Gangnam Style" became a major international hit, driven primarily by theviral popularity of its music video; "Gangnam Style" would become the first YouTube video to reachone billion views.[46] "Harlem Shake"—a song bytrap producerBaauer that had become associated with aviral dance meme—was boosted to number-one on theBillboardHot 100 chart in February 2013 after U.S. YouTube views for music content were added to its methodology.[47][48]
After Spotify's launch, new competing services began to emerge in the North American market, includingBeats Music—which was backed by headphone makerBeats Electronics, MicrosoftGroove Music Pass (formerly Xbox Music),[49]Amazon Music Unlimited,[50] andGoogle Play Music All-Access (a branch of a service also offering downloads and a music locker).[51][52] Beats Electronics was later acquired byApple Inc., which discontinued Beats Music in 2015 and replaced it with a newApple Music service.[53][46]Tidal launched in 2015 with backing from rapperJay-Z, emphasizing high-fidelity audio and exclusive releases.[54][55]
In October 2015, after initially offering "Music Key"—a subscription bundling Play Music All Access with ad-free viewing of music content on YouTube,[56][57] Google launchedYouTube Red— which extended ad-free access to all videos on the platform, and addedpremium original video content in an effort to compete with services such asNetflix.[53] Concurrently, YouTube introducedYouTube Music, anapp dedicated to music content on the platform.[53][58] In 2016, Rhapsody was renamedNapster; Rhapsody had acquired Napster in 2011.[59]
In 2017, Pandora launched a "Premium" tier, which features an on-demand service more in line with its competitors, while still leveraging its existing recommendation engine and manual curation.[60] In October 2017, Microsoft announced the discontinuation of Groove Music Pass, and directed its users to Spotify.[61]
In 2018, YouTube Red rebranded as YouTube Premium, and YouTube concurrently introduced a redesigned YouTube Music platform, along with a separate YouTube Music subscription at a lower price point. The YouTube Music platform can be used without a subscription, but carries video advertising, and does not support background playback on mobile devices.[62][63] The YouTube Music service eventually replaced Google Play Music entirely in 2020, and Google no longer operates a digital music store.[64][65][66]
In 2019,Beatport, an online music store primarily targetingDJs andelectronic music, announced music streaming services known as Beatport Cloud and Beatport Link. The latter is designed to integrate directly withDJ software such asSerato,Rekordbox,Traktor,[67][68][69][70] and its first-partyweb application Beatport DJ (which launched in 2021); the service targets professional DJs shifting to streaming-based models for their music libraries, as well as amateur DJs.[71][70]
By 2013, on-demand music streaming had begun to displace online music stores as the main revenue stream of digital music.[46] In 2023, theInternational Federation of the Phonographic Industry (IFPI) reported that growth in revenue in the music industry had increased by 11.2% compared to the previous year. In 2021—its largest increase in the past 20 years—with paid music streaming services accounting for $12.3 billion in revenue ($2.2 billion YoY), and ad-supported streaming $4.6 billion ($1.1 billion YoY). Revenue from music streaming services had more than doubled since 2017, and the estimated number of users of paid services was 667 million in 2023.[72][73] In 2019, streaming services accounted for the majority of music revenue globally for the first time.[74]
Music streaming services have faced criticism over the amount ofroyalties they distribute, including accusations that they do not fairly compensate musicians and songwriters.[75][76] In 2013, Spotify stated that it paid artists an average of $0.007 per stream.Music Week editor Tim Ingham commented that while the figure may "initially seem alarming," he noted: "Unlike buying a CD or download, streaming is not a one-off payment. Hundreds of millions of streams of tracks are happening every day, which quickly multiplies the potential revenues on offer – and is a constant long-term source of income for artists."[77] Amidst those rising number of streams, Spotify has also confirmed that they will require tracks "to get a minimum of 1,000 listens every year to receive royalties" starting early 2024.[78] Additionally, some have expressed concern about the focus of streaming metrics as the primary source of monetary compensation for musicians and songwriters as streaming fraud gains traction.[79][80]
When music services already face critiques for taking large cuts from artists, some say their business models help record labels profit even more.[81] Streaming services take the revenue from songs on their platform and send it back to record labels and management companies that own the rights to the songs. These companies then take another cut before sending it to the artists. However, in the past, there were ‘royalty models’ that would allow for artists to get a share ofphysical albums sold, but with the creation of streaming services, those models have now become obsolete.[81] This is the case for smaller artists, who take up a large portion of the music industry. Without an extensive fan base, these artists aren't able to make a sufficient amount of money.[81]
To increase the diversity and value of their services, music streaming services have sometimes produced or acquired other forms of music-related content besides songs, including music documentaries[82] and concert presentations.[83][84] Spotify had begun to increasingly make investments intopodcasts, buoyed by acquisitions such as sports publicationThe Ringer and exclusive rights toThe Joe Rogan Experience.[85][86][87][88]
In the 2010s,record charts began to increasingly include listener data from streaming platforms into their methodologies. In March 2012,Billboard launched a new "On-Demand Songs" chart, which was added to the formula of its flagshipHot 100 chart.[46] In January 2013, On-Demand Songs was broadened into "Streaming Songs",[89] and YouTube views in the United States on videos containing music were added to the Hot 100 formula the following month.[47][48] In 2014, theUK Singles Chart similarly changed its methodology to include streaming.[90] To account for streaming and the decline of album purchases, album charts began to adopt a metric known as "album-equivalent units" (AEUs), which are based on purchases of the album, and how many times individual songs from the album have been purchased or streamed.[91][92] In 2016, theGfK Entertainment charts in Germany also added streaming to its methodology; however, the metric is based on revenues generated from a song's availability on paid platforms only, thus excluding free ad-supported services.[93][94]
Streaming services have led to new types of promotional strategies for music releases; in 2016,Kanye West received attention for making multiple updates to his albumThe Life of Pablo on streaming services following its initial release (including mastering tweaks and, eventually, a new song), withJayson Greene ofPitchfork comparing it toupdates tocomputer software.[95][96][97][98] In several prominent cases, artists have temporarily replaced thealbum covers of their existing discography to tease an upcoming release, such asDua Lipa replacing her albums' cover art withkaleidoscopic versions to tease "Houdini",Doja Cat replacing her cover art with red-tinted versions to teaseScarlet, andCharli XCX promotingBrat by replacing the cover art of her past releases with versions mimicking the design of theBrat cover.[99][97][100][101]
Peoplesound differentiates itself by filtering out poor quality artist submissions before they are posted on-line. "We get rid of the crap early on. Some sites will post recordings of kids singing in the bath but we have a dedicated team of ex-A&R men deciding which artists will make it onto Peoplesound.
