The global music industry braved the challenges posed by the COVID-19 pandemic last year and grew 7.4%, marking the sixth consecutive year of growth, per a report by the International Federation of the Phonographic Industry (“IFPI”). So, what led to this growth in an otherwise tumultuous year that saw live music events being halted? The answer is music streaming. Notably, the IFPI report stated that total music streaming grew 19.9% and reached $13.4 billion in 2020, accounting for 62.1% of the total global recorded music revenues.

As people were stuck at home for the better part of last year due to pandemic-led social distancing norms, they resorted to several at-home forms of entertainment. While the other areas of at-home entertainment like gaming and binge-watching shows and videos on streaming platforms gathered popularity, music streaming also joined in. What gives music streaming an edge is the fact that it allows users to listen to a varied library of songs, easily accessible from a smartphone with an Internet connection. Moreover, users have the option to download their favorite songs on their devices in case they have to go somewhere with no access to the Internet.

What’s more is that music streaming services also offer personalized recommendations suited to the user’s moods and listening patterns, thereby allowing them to discover music that might be to their liking. Reflective of these benefits of music streaming, a report from Statista showed that Spotify Technology S.A. SPOT, which is a major player in the music streaming market, saw its premium subscribers rising to 155 million in the fourth quarter of 2020, from 124 million in the fourth quarter of 2019.

Streaming Aids U.S. Music Revenue Growth in 2020

The year 2020 turned out fabulous in terms of music in the United States as a report by the Recording Industry Association of America stated that the overall recorded music revenues grew 9.2% in 2020, as mentioned in a Variety article. Moreover, the article mentioned that that the overall music industry growth in the United States was supported by the rising popularity of music streaming. Notably, the article stated that music streaming services grew 13.4% last year, contributing $10.1 billion to the overall revenues generated. Interestingly, 2020 also saw paid subscriptions for on-demand music services in the United States witnessing their highest-ever increase in a single year. Markedly, the article mentioned that the average number of subscriptions rose to 75.5 million in 2020, from 60.4 million in 2019.

Music Streaming Poised to Grow

Even as we move beyond the pandemic, the popularity of music streaming is not likely to wane. Rather, the conveniences that it provides to listeners should allow it to grow in the future as well. Notably, a report by Allied Market Research stated that the global online music streaming market is expected to witness a CAGR of 9.8% from 2021 to 2027. Such a positive scenario would bode well for major players in the music streaming industry like Spotify, Apple Inc.’s AAPL Apple Music, and Amazon.com, Inc.’s AMZN Amazon Music.

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