NEW YORK, Oct. 17, 2016 /PRNewswire/ -- If you follow the full arc of the history of music – from troubadours in the street to the teenager streaming his favorite playlist – the change in how we listen to music is truly astounding. And yet, while the evolution is far from over, music streaming services are not simply the latest stage. They also represent a paradigm shift.
● Music format have become smaller and less tactile, shifting purchase and listening patterns.
● Yet, it's digital that has had the most profound – and arguably the longest-lasting – impact. Digital technology also made streaming music possible. As the industry's fastest growing revenue source - exceeding $1 billion in the first half of 2016 alone –music streaming may also be saving it.
● To attract new users, Pandora and Spotify are pushing the boundaries of technology to develop new features, such as high-fidelity streaming audio formats.
● Despite these promising developments, music streaming services face a plethora of challenges.
○ One area causing tension is pricing. Subscriptions are the most profitable business model for streaming services, but to attract users they must offer some tier of free or ad-supported service.
○ Even so, to survive, the services are experimenting with different pricing strategies. To encourage freemium users to upgrade, for example, Spotify may allow artists to offer their new releases only to paid subscribers. Other experts predict a pricing war, as players such as Amazon and Pandora introduce low-cost subscriptions designed to undercut competitors such as Apple Music.
○ Another challenge is piracy. New threats emerge. The latest is stream-ripping, which enables users to permanently download music from streaming services.
○ Other practices also threaten the industry. As artists seek to protect their own revenue, they're signing exclusive deals with streaming services, a path R&B artist Frank Ocean followed recently when releasing his album, Blonde, on Apple Music.
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