Major Labels Earn $16K Every Second From Streaming, But Will It Last?

Major labels are now pulling down over $16,000 per second in streaming which, while an impressive number, is somewhat tempered by the fact that the growth of streaming itself seems to be slowing down.

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Guest post by Bobby Owsinski of Music 3.0

Yes, you read the headline right. The major labels are now bringing in over $16,000 per second from streaming alone. That amounts to over $1 million per hour, according to an analysis by Music Business News. That all sounds great, but the problem is that although the income from streaming is still growing, streaming itself seems to have slowed down.

The problem is that the major’s collected $877 million from streaming in the first half of 2019, and only $709 million in the first half of this year. That means that global major label streaming revenue growth decreased by 19.1% in the first six months of this year.

That’s an ominous sign.

The thought was always that when North America and Europe slowed, the rest of the world would only be getting going on paid streaming subscriptions so the good times would continue to roll. In fact, Goldman Sach’s predictions of a $30 billion worldwide business by 2030 (it’s only about $19 billion now) is based on this.

But don’t misunderstand what’s said above. Music streams are increasing, it’s the revenue that’s not. One of the reasons is that the Chinese market, dominated by Tencent, still hasn’t gotten the hang for paying for streaming music. Nor has Japan, the second largest music market in the world by revenue. India is huge but the subscriptions are small as are the rates they pay.

So the possibility of generating more income is there, but it now looks like there’s a barrier to increased revenues that hasn’t been anticipated. Plus the fact that Spotify is not yet allowed in China, and the Asian market isn’t as keen on Western music as in past eras, all have something to do with what may be an unforeseen problem for major label music execs.

Make no mistake, the music streaming side of the music business will continue to grow, but it now seems like it won’t be as easy to generate the expected revenue as anticipated.