How well/bad is the industrial music scene doing in the digital download/streaming market? We found it out for you.Posted on 18/08/11
In the past few months many industrial bands and labels have been quite pessimistic on streaming music services. They would not be generating enough revenue and would cannibalize on the existing download stores.
But is this really the case? We at Side-Line decided to check into the digital sales from 10 labels from this scene and compare 2 months, June 2010 and June 2011 (editor's note: Due to contractual obligations we cannot reveal what labels we have checked on, but let's say, it's somewhat the top 10 of today's industrial scene).
Here are the results as far as the type of music delivery is concerned:
- June 2011
- download: $63,800
- stream: $10,350
- other: $2,500
- radio: $810
- ringtone: $69
- June 2010
- download: $48,000
- stream: $3470
- radio: $59
- ringtone: $30
The details show that both streaming music services and radio have seen a massive growth. Streaming services tripled percentage wise while radio services increased with a factor 14. In concrete revenue - or volume as you wish - you'll notice though that it's especially streaming services that are taking off big time. Whereas last year they only generated $3470 in revenue for June, this year that amount was already $10,350. That means hundreds of thousands of streams, actually millions: 32.300.000 to be precise.
When we dug some further in the revenue details we got to look at, we saw that Spotify accounts for 40% of the total volume in streaming. Last year that was only 29%. Which means that Spotify is not only growing fast but is also busy taking the major part in the music streaming business and that whilst only being active in 8 countries.
We also checked if iTunes lost share during this period. While in June 2010 it was good for 66% of total digital revenue share, in June 2011 it fell back to 63% but still increasing it's total revenue with 9%. The loss in total share surely is more than compensated by the increase in revenue in streaming music. Another sign that streaming didn't really take a bite out of the revenue share is that certain countries start having a much larger share in revenue generation than before. And behold, the countries involved are Finland, France, the Netherlands, Norway, Spain, Sweden and the United Kingdom. Exactly the countries where Spotify is active (the US revenue as far as digital revenue via Spotify is not yet known).
We also checked how the revenue from these countries was created. With the exception of the UK, which has a mature download market, the other 'spotified' countries mainly generated their revenue via streaming, with Spotify being the absolute leader there reaching 90% of market share.
In other words, all seems to indicate that streaming is not cannibalizing the iTunes download market all that much. Instead, it is generating extra income from countries that before didn't generate all that much as far as digital and physical CD sales is concerned.
The arrival of Spotify on the US market, where iTunes is both King and Queen will be an interesting test-case to see if Spotify is going to have a different impact. Considering that the UK download market (with both iTunes and Spotify being active) is increasing with 25% since last year, it's to be believed that both models will only push the revenue even higher.
Good news for industrial labels which have seen their CD sales drop with almost 30% since last year. Note that the drop in CD sales is far from being covered by digital sales so far, this was confirmed to us by every label we talked to. Note also that artists often get a higher percentage on digital sales leaving less financial room for promotional activities.
And as an appetizer, here are the top 15 countries as far as digital sales goes for industrial music:
- United States
- United Kingdom
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Posted by B. Van Isacker
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