The Rise of Premium Audio Subscriptions
This article is published in collaboration with Statista
by Florian Zandt
Since Spotify launched its streaming service in the United States twelve years ago, how we consume music has shifted dramatically. Now, music streaming is the biggest driver for the industry, making up two thirds of the total global revenue with recorded music. As our chart shows, subscription-based streaming services have overtaken free or ad-based platforms in the U.S. over the last few years.
According to our Statista Consumer Insights survey, 43 percent of respondents from the United States said they spent money on a subscription for a music streaming platform compared to 35 percent in 2020. The share of people paying for downloads or not listening to digital music has remained constant since 2020, so this shift is likely explainable by listeners moving away from free services. Nevertheless, around one third of respondents claimed to use ad-based or completely free streaming sites in the past twelve months.
2022 saw global revenues with recorded music increase by nine percent compared to the previous year according to IFPI's Global Music Report. Almost half of the $26 billion earned can be attributed to subscription-based streaming, with ad-supported services adding another 19 percent. Revenues with physical media also increased by around four percent, with the ongoing vinyl resurgence carrying most of the weight in that department.
Interestingly, Asia alone was responsible for half of all physical media sales. This can, in part, be explained by a strong CD culture in Japan, an overall revenue surge of almost 30 percent in China as well as the marketing and sales tactics of K-Pop and J-Pop artists offering up multiple versions of the same physical record, which appeals to fans and collectors.
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