After 20 years of streaming, how is the music industry doing?

Alexander Käßner

Hi, I’m Alex, a designer at Datawrapper focused on interface and experience design. Back in April, I wrote a Weekly Chart about music festivals. Today I’ll be talking about music again, this time on the business of streaming.

Music plays an important role in my life. I couldn’t live without it — and I’m sure many of you feel the same! Music can help me focus on work, relax in free time, or get me hyped to go out.

But even though music is so important to me, it’s been many years since I owned any. I don’t have a single CD anymore, or even an MP3 file. Instead, I fully rely on streaming services like Spotify, SoundCloud, and YouTube. The same is probably true for most of you:

It’s interesting to see how clearly a few main players in music streaming have impacted the industry as a whole. But I find even more interesting that, to this day, revenues from streaming have never surpassed the peak generated by physical sales in the late 90s. And that with the hundreds of millions of people streaming music every day.

Although there are many different streaming services available, Spotify holds the top spot by a large margin. Even Apple, which has the massive advantage of preinstalling its Music app on millions of iPhones, doesn’t come close. All of which only makes it more astonishing that Spotify has been operating at major losses (often in the hundreds of millions of dollars) for the most of its existence. In 2017, the year it went public, Spotify had its biggest-ever net loss of about 1.4 billion dollars — yes, billion.

I assumed that the revenue generated by music streaming today must be way larger than back in the days of physical formats, but I was wrong. What are the reasons for that, you ask? That's a topic for another day.

Thanks for joining me into this little excursion into the music business (written while listening to music 😄). If you’re interested in learning more, I recommend the YouTube video “Why Spotify’s ‘Grand Strategy’ Will Fail,” which helped to inspire this Weekly Chart. Come back next week for a Weekly Chart from our product specialist Guillermina!

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Alexander Käßner

(he/him, @alexkaessner, @alexkaessner@mas.to) is a designer at Datawrapper, especially focused on interface and experience design. When not iterating on Datawrapper’s interactions, you can find him working on his side projects, jogging around Berlin, taking care of his small garden, or playing volleyball.

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