Struggle to make streaming profitable

Spotify is the most successful streaming music service in the world and streaming is the music industry’s fastest-growing revenue source, yet none of the popular services has ever turned a profit

Global music industry revenues (2015) $15 billion

Digital revenue $6.75bn

Streaming $2.85bn

Physical sales $5.85bn

Synchronisation revenues* $300m

Performance rights $2.1bn

*music used in films, television, advertisements, video games etc.

Total listeners

Paying subscribers

200m 100m 40m 17m

SoundCloud: Launches 2007 in Sweden, based in Berlin

Catalogue 135m tracks

Revenue (2014) €17.4m

Royalties – only paid to “premier partners” – estimated at $1.99m

Loss for year $39.14m

Spotify: Launches 2006 in Sweden and UK

Catalogue 30m+ tracks

Revenue (2015) €1.95bn

Royalties – 70% of revenue paid to rights-holders €1.37bn

Loss for year €173.1m

Apple Music: Apple acquires Beats Music in 2014, launches 2015

Catalogue 30m+ tracks

Revenue (est.) $2.04bn†

Royalties – 71.5%-73% paid to rights-holders $1.46bn-$1.49bn

Profit/loss unknown

The winners: Sony Music Entertainment’s streaming revenue grew by 57% to $986m over 12 months to March 2016. Universal Music Group’s was up 56.2% to €954m.
Warner Music Group earned $181m in first three months of 2016

†17 million subscribers paying $9.99 per month 

Sources: IFPI Global Music Report 2016, Music Business Worldwide.com