People are streaming more music than ever. The problem for the music industry is that the majority of streamers are listening for free on YouTube.
A full 47 percent of global music consumption is now happening on YouTube, according to a new report published by the International Federation of the Phonographic Industry. The IFPI’s Music Consumer Insight Report 2018, which takes a look at the state of music consumption across the globe also found that more than half, 52 percent, of on-demand music streaming occurs over video.
While YouTube offers plans like YouTube Music for $9.99 and YouTube Premium for $11.99, paid audio services account for only 28 percent of on-demand music streaming. Free audio streaming accounts for 20 percent of on-demand play.
The conclusion is a particularly big deal in the context of per-stream royalties. This IFPI study found that while Spotify pays around $20 per user in royalties, YouTube pays out less than $1.
Furthermore, the study found that 35 percent of streaming-music consumers cite user uploaded services like YouTube as the primary reason they don’t subscribe to a paid audio subscription.
YouTube’s effects on the music industry increase when the study pours over copyright infringing music downloads. Over one-third, or 38 percent, of music listeners around the world consume music through illegal downloading. Of those people, 32 percent are downloading music through stream ripping.
Over the past few years, the music industry has waged a growing battle against stream-ripping sites like the once popular YouTube-mp3.org, which has since been shut down. These sites, which are still prevalent online, allow users to simply insert a song’s video link, usually from YouTube, and receive a downloadable audio file in return for offline listening.
With an abundance of music available for free via YouTube video streams, a significant number of music consumers are finding little-to-no value to in paid on-demand streaming services, even the very one provided by YouTube. With that in mind, it seems that the music industry will have to continue to shift in a digital age where video is king.
