The War of the Music Streaming Companies

How big is the graveyard for music streaming companies?

Streaming service providers are engaged in a full-scale financial slaughter-fest against each other for audience growth, subscribers, technology advantages and marquee names to burnish their brands.  Spotify inked Joe Rogan exclusively for a $100 million multi-year contract, and have just signed up Michelle Obama for “The Michelle Obama Podcast,” which is set to debut July 29th.

On July 14, 2020 Spotify announced it was rolling out its services to Russia and twelve new European countries Albania, Belarus, Bosnia and Herzegovina, Croatia, Kazakhstan, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, Slovenia, and Ukraine. This makes Spotify available in 92 countries.  Apple music is available in over 100 countries.

Elton John hosts a “Rocket Hour” show on Apple Music.  Kaye West is soft-launching a self-titled streaming service “YEEZY Sound” promising content from artists Abstract Mindstate,  G.O.O.D., CyHi the Prynce, and Grammy-winning vocalist Tony Williams. West also announced the service would provide exclusive music from Pusha T, No Malice, Clipse, KC and his daughter North West. YEEZY Sound ventures say they will distribute exclusive video in a streaming service similar to Hulu. Jay-Z is at the helm of the Tidal streaming service which promises exclusive artist content in a lossless format. ‘Lossless” formats use audio compression that is said to preserve audio so the sound is exactly the same as the original source, unlike “Lossy” formats, such as mp3, wma and aac.  Tidal was originally named WiMP, and was sold to Jay-Z by the Norwegian company Aspiro in 2015.

A year ago, Sirius purchased the music and podcast platform Pandora for three billion dollars. This July Sirius also bought Stitcher, a media company that specializes in the creation, distribution, and monetization of podcasts, for $325 million.

Soundcloud, with 76 million registered users and 175 million unique monthly listeners (as of March 2019), have partnered with Pharrell Williams to create a compilation album of original songs by lesser or unknown artists, selecting 10 out of 25,000 songs submitted during the quarantine lockdown, it’s not know if money is changing hands over this connection, but Soundcloud does not pay it’s artists for streaming unless they have specific partnership arrangements with the company.  Soundcloud has now started offering audio mastering services charging users $4.99 per track, competing directly with LANDR, a cloud-based mastering and digital disribution service company.

When iTunes was launched, in April of 2003, it was the only legitimate digital music download service, and by February of 2010 it became the largest music vendor in the world. As of June 2019, Apple senior vice president of Internet Software & Services Eddy Cue declared Apple Music had surpassed 60 million users, which places the company behind competitor Spotify with 248 million monthly active users and 113 million subscribers.

Facebook, struggling with audience “leaking’ to youtube, is rumored to be implementing an “official” video tool on August the 1st, for artists to retain viewership within their platform.  We learned this because Facebook emailed artist-page administrators instructions to have their licensed music videos automatically integrated into their facebook pages.

As of October 2019 Today, Spotify has a market value of about $21 billion, to put that in perspective Amazon’s net worth as of July 17, 2020 is $1000 billion, putting Amazon in second place behind Walmart in the Fortune Top Ten Campanies list.

Hot on the heels of the COVID-19 quarantine, the Canadian start-up Yoop offers artists what they are calling the ‘Yoop eSpace’ – a combined audio visual streaming event where Artists can be shot in high definition by multiple cameras, and  perform in front of large projection screens, where they can see their audience, or a portion of them. Producers in the control room can select individual audience members and throw them up on the large screen for the artist to intereact with them one-on-one. The Canadian singer Alicia Moffet launched her new album entitles “Billie Ave.” performed a show of songs from the album in the Yoop eSpace. It’s reported that she sold 5,500 tickets at $20 each, grossing $110,000 for this interactive performance

As of July 2020 Tik Tok, the social sharing video application, has been downloaded over 165 million times by US consumers – but the app may be in jeopardy, the US administration are considering banning the app, which was developed in China by ByteDance, and has already been outlawed in India for privacy concerns. (Tik Tok has access to your mobile phone clipboard and text entries.)

Caption/Credit. A virtual performance space in Quebec, utilizing multi-camera & real-time editing and incorporating audience involvement. CBC/Radio Canada.

If you were wondering if it’s even worth sharing your music via digital streaming services – here are some ‘back of the envelope’ music streaming royalties estimates of payments to artists by 100,000 plays:

Amazon: $402

Apple Music: $735

Deezer: $676

iTunes: $40

Napster: $1,900

Pandora: $133

Spotify: $437

Tidal: $1,250

Youtube: $169

iTunes was particularly difficult to research so I calculated it from my own music receipts, and may be artificially low – but I doubt it.  Please bear in mind these dollar numbers don’t perfectly reflect the complexity of the services’ relative computations as they are all different. Payouts can depend on variations of (for instance) the following conditions: the listener’s location and country. Whether the listener has a paid subscription or a free account, the specific artist’s royalty rate, and the relative pricing & currency values in different geographical regions.

The number of music streaming services that are now active, and in some cases profitable, is constantly in flux. Right now the following companies are viable: Accuradio, Amazon, Anghami, Apple Music, Bandcamp, Deezer, Earbits, Google Play, hoopla, I HeartRadio, Jango, JOOX, KKBOX, Line Music, LiveXLive, MOOV, Music Choice, My Tuner Radio, Napster, NetEase, Pandora, Patari, PrimePhonic, Qobuz, QQ Music, ROXI, JioSaavn, Sirius, SoundCloud, Spotify, Stingray, Tidal, TuneIn, Wolfgang’s, and YouTube. The list of failed or extinguished music streaming services is as long, and includes such recognizable notables as: Rhapsody, Zune, Beats, Xbox Music, MOG and Yahoo! Music Unlimited. The graveyard for music streaming service companies is getting bigger every year, while the maternity ward seems to be expanding at the same rate.

Byline: Conrad Warre from London, England, writes for music publications and plays lead guitar in the Boston-based acid-blues band Bees Deluxe.