I highly doubt subscription services like Spotify will ever take over the United States. As previously mentioned, Americans like to own their music, and it isn't likely that they'll ever take openly to a streaming service. If it ever does catch on, then my guess is that Billboard will count number of streams toward charting.
Then how do you explain the popularity of Netflix streaming? or RedBox (that let you rent DVD for $1 a day)? (or the old Blockbuster before Netflix bankcrupt them?)
And Netflix streaming selection is pretty horrible. Maybe 1/5 of the movies people want to see.
Imagine Spotify but with only 1/5 of the music available.
p.s. Pandora Radio is a "streaming service" and over 100 million Americans are using it.
This is not the future of the American music market. Quote me.[/CENTER]
We will see.
Here's what I know: The music industry is hoping subscription will take off because they will make a lot more money from it.
Global Music Sales is about $15 billion (down from $29 billion back in the peak CD era of 2000). Let's assume nobody buying a CD or a digital song EVER again, to make the same $15 billion, subscription would require about $15 billion / $110 (on average) = 136 million paying subscribers worldwide.
Worldwide, are there 136 million people who be willing to pay $10 a month to listen to any song they want, anywhere they want?
We are at the VERY beginning of subscription music thanks to the proliferation of smartphones. Subscription music needs mobile devices in order to thrive. And it is now here (with maybe 4 out of 10 people using a smartphone vs. a feature phone).
Imagine 5-7 years down the road when 80-90% of phones are smartphones.......
According to The Nielsen Company & Billboard's 2011 Music Industry Report, 1.271 billion digital tracks were sold in 2011. These are the tracks that count toward the Billboard Hot 100. (each week, around 25 millions are sold).
1.271 billion digital tracks at $1 each = $1.271 billion USD., equivalent to
$1.271 billion USD / $110 on average for subscription = 11.55 million paying subscribers.
Right now, in the USA, there are around 3 million paying music subscribers. It just needs to grow from 3 million to 11.55 million in order to "catch up" with legal downloads from Itunes/AmazonMP3/GoogleMusicStore.
Muve Music and Spotify both went from 0 to 500,000 in a few months. The WildCard is the large mobile operators like ATT (90 million subscribers) Verizon (95 million subscribers) T-Mobile/Sprint (80 million subscribers). If they create their own Spotify like Cricket did with Muve Music, subscription will go through the roof.
A lot of people are already paying $100+ a month for their cellphone bill, these companies could tempt their customers with $10 extra for access to all the music in the world. Even if only 10% sign up, that's 25 million paying subscribers.
end of 2011: 3 million
2012: 5 million
2013: 7 million
2014: 10 million
2015: 14 million
If the Big 4 USA Mobile Carriers join in, it could go from 3 million to 30 million in a space of a year or two. Cricket proved that it works for a small regional carrier by building its own Spotify in Muve Music. It now has over 550,000 paying subscribers. Not bad for a service that debuted nation wide only a few months ago.
If AT&T, Verizon, Sprint and T-Mobile creates their own Spotify (like Cricket did with Muve Music) in 2013
end of 2011: 3 million
2012: 5 million
2013: 14 million (start in 2013)
2014: 21 million
2015: 30 million
What if I don't have access to the internet? If I "own" the song, I can just go listen to it on my iTunes or iPod.
Originally posted by Vithor
So, say if I don't have internet connection for a month, i'll stay a month without listening to music? Nope. I'll stick to having the files on my computer.
You still can play all your playlists offline with Spotify on your mobile or on your computer without any internet connection. I have an UK spotify accout because I lived there until last year. I never got used to buy music, even when the iTunes Store came out in Brasil. Spotify's still way better to me. No way.
The Top 40 is facing a shake-up as chart bosses consider incorporating songs from music streaming sites.
Offering free, legal access to millions of tunes, online jukebox services like We7 and Spotify have taken off in 2009.
Users can listen to tracks without paying to own them, as they have had to with vinyl, tapes, CDs and downloads.
The Official UK Charts Company said the Top 40 was "bound to" incorporate songs from streaming services at some point, but not for at least another 12 months.
Because listeners do not pay per track - if at all - those plays would be likely to carry less weight than normal sales.
That would be a big departure from the way the the official singles chart has been compiled since it was launched in 1952.
It has always been based purely on sales, with each individual purchase - whatever the format - treated equally.
But the streaming and subscription services may soon become too popular to ignore.
Spotify offers songs for free with adverts, or without ads for a £9.99 monthly fee. It registered one million UK users in April - just two months after its public launch.
We7, which goes down the free, ad-funded route, is expected to pass the million mark in the coming days.
Services like Napster, HMV and Nokia give customers access to unlimited tracks for a monthly fee and Virgin Media has just announced a similar offering, with BSkyB expected to follow suit.
Official Charts Company managing director Martin Talbot told BBC News the charts had traditionally counted individual singles bought for permanent ownership.
"The key task that we've been getting to grips with over the past 18 months has been ensuring that post-download, and post-permanent ownership of music, we're also counting how consumers are consuming their music in other ways," he said.
"The charts have always been there as a popularity poll, as a means of identifying what are the hottest records of the moment.
"That's been relatively simple when people have bought stuff to keep forever. But that's going to become increasingly more complicated."
The charts have already come a long way since 2005, when the first downloads counted towards the Top 40. Now, 98% of all single sales are digital.
Mr Talbot said streams would be integrated into the main chart when they become "a very big part of the way people consume music going forward" and fans were buying fewer tracks as a result.
"I'm sure it will come upon us quicker than we might anticipate but none of us really know when it will happen," he said. "I think ultimately it's bound to happen. But that could be five years, it could be 10 years, it could be 20 years."
There was currently no sign of a slow-down in single sales, Mr Talbot said. Some 115 million singles were sold last year - compared with a low point of 30 million in 2003. This year's total is expected to be 160 million.
Streams vs downloads
One big question if streams did count towards the charts would be how much weight they would carry.
"Knowing what a stream is worth compared to a purchase of a download, for instance, is very difficult to identify at the moment, but that's obviously going to be the next step," Mr Talbot said.
The advent of services like We7, Spotify and Imeem, on top of established sites like YouTube, MySpace and Last.fm, have led some analysts to predict that people may become less interested in owning music.
Instead, they may be happy to stream songs from huge catalogues, especially as technology makes it possible to use these services on the go.
Right now, on demand subscription like Spotify is about 15% and legal download is about 85% in England.
I think a lot of chart will use the weight of 200 streams = 1 download (since they pay about the same).
On demand streaming is not like RADIO airplay because the listener can choose which songs to play. With radio, you might want only to listen to a few songs on their playlist.
Muve Music subscription service looking to expand beyond the US
With 600k paying subcribers, bundling unlimited music with voice, texts and data is working well
I spoke to Bolton at the ShowStoppers event in Barcelona on the eve of Mobile World Congress. Cricket and Muve Music's presence here is a sign that the service may expand beyond the US soon.
"For Cricket, it's lowering churn and increasing ARPU [average revenue per user], so we've been thinking that other carriers might like to have this," says Bolton.
"Muve Music is spinning off, and the goal is to get it working with other carriers. The labels are very excited and want to see it go international: they see Muve Music as the vehicle to take this model global. That said, we have no announcements yet."
Muve Music customers in the US certainly seem keen: Bolton says the average user downloads 300 songs a month, and plays them for nearly 40 hours – an important metric, since Muve Music pays labels and publishers per play, rather than per download.