The Music (Streaming) Scene Is About To Get More Interesting

Few industries have been disrupted by digital and mobile technology as has the music industry over the past two decades. The economic model has shifted as consumers increasingly consume music via bite-sized chunks of steaming content, forcing changes not only in how musicians craft their recorded works and concerts, but how music distributors and other players make their own money.

Further evidence of that shift — and how it could impact big digital players — came this week from China. With the rollout of its own competing service, the Chinese firm behind the popular TikTok video app is set to rival players such as Apple and Spotify in the music streaming market. ByteDance is in discussions with the biggest record companies around the world for global licensing deals to put their songs on a new music subscription offering, the Financial Times reported, citing unnamed sources.

Even though the news about this potential change is still emerging, the impact could be significant. For one, music executives are reportedly keen to make money from TikTok, which comes at no cost to use. They are said to see a new app from the company as a welcome entrant to the market for music streaming in which firms with the inclusion of Spotify, Amazon, and Apple provide a similar music catalog. The move, according to the report, would have ByteDance compete head-on with industry leaders Tencent, Spotify, and Apple in the paid music market.

Streaming Growth

That’s not all that could be at stake. Competition is fierce in the field of music streaming. Recent data from the third quarter gives an picture of all that.

For instance, as Spotify Technology SA brought on more premium service subscribers than expected, the company came out ahead of Q3 revenue expectations and posted a surprise profit. It had reportedly “outstripped” Apple Music in the race to dominate music streaming around the world, with its number of premium subscribers had grown by 26 million the past year to reach 113 million at September’s close.

Spotify rolled out its offering more than 10 years ago and reportedly has had the ability to overcome the resistance of some music artists as well as big record labels to help change how people consume music. And Hargreaves Lansdown analyst Nicholas Hyett noted per a Reuters report that “the fact that it’s delivering growth against an increasingly competitive backdrop is particularly impressive — especially when that competition is Amazon and Apple.”

It’s hard to divorce any story about music streaming services from the larger context of subscription commerce, which keeps growing and expanding as old players sometimes stumble and newer entrants gain speed. As recent PYMNTS research has documented, consumers can access a wide range of retail products through subscription boxes, including meal kits, pet supplies and beauty items — to name a few options. These services are highly popular, with an estimated 41.2 million American adults subscribing to some type of subscription retail product offering.

Apple Problems

But not every player in subscription commerce and streaming services is having an easy time of it. That applies to Apple. Apple News+, the tech giant’s paid news service, has failed to add new subscribers since it launched in March, according to CNBC.

The service attracted about 200,000 subscriptions in the 48 hours after it launched, but the number has stayed at that level since then. Subscribers who use the service have access to about 300 top publications, including The Los Angeles Times and The Wall Street Journal. The service costs $9.99 a month, and features categories like news, sports and entertainment. Apple Music has significantly more subscribers, with a user base of about 60 million.

Many publishers are disappointed with the revenue from the service, as they expected it to be much bigger. Apple takes about half the revenue from every subscriber, and publishers divvy up the rest, based on how much time a person spends reading content. One publisher said that his company gets between $20,000 and $30,000 a month, which is much less than it planned to get.

The company hasn’t really been advertising the service, and is reportedly considering adding it as a bundle with Apple Music and Apple TV+. People familiar with the matter said that Apple is committed to the service, and will continue to nourish it.

No matter what happens, it’s a safe bet that streaming, and music streaming in particular, will continue to offer sharp challenges and robust opportunities in the new decade.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.