It’s what some music industry prognosticators have been warning for years now — streaming media would eventually outperform digital downloads. Well, it appears that that very forecast has come to pass, according to Nielsen.
More music fans are willing to spend money on streaming services such as Spotify and Rhapsody, as opposed to buying digital tracks on iTunes and other download purveyors. Nielsen’s The Hyper-Fragmented World of Music survey (free registration required) conducted on behalf of music industry conference MIDEM found that 26 percent of consumers prefer streaming to 17 percent of downloaders. Of course, both pale compared to the number of folks who admitted downloading music for free — just under half of all respondents.
If the report is indicative of the market in general, it suggests a growing awareness of streaming services, albeit a lopsided awareness. In fact, consumers in Asian countries are most aware of streaming music (70 percent) while those in Latin Americans are the least aware (46 percent). Also, younger consumers are more willing to pay for these services compared to older demographics who are aware of them.
With the proliferation of digital platforms available to consumers, one might think that both streaming and download services stand at the edge of a new golden age of monetization. Not exactly true, some say. The Nielsen report posits that growing fragmentation has actually made it harder for consumers to choose among platforms, both legal and otherwise.
“This ecosystem is characterised by a myriad of online consumption channels, and despite illegal use of music, the opportunities for revenue generation seem broad,” according to the report. “However, efficient capitalisation upon these opportunities is contingent upon identifying where the demand is, and can be improved through a better understanding of what consumers deem to constitute significant added value.”
Interestingly, the report further suggests that integrating certain attributes of the CD — that’s compact disc, for all you young-uns — could prove effective in monetizing streaming and downloading services as the industry peers down the barrel of the second decade of the 21st century. What that looks like remains to be seen, but for those in the streaming and download markets, the window of opportunity is perhaps as wide open as it will ever be.
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