The Ledger
Even before a disruption in January caused by a looming U.S. ban, TikTok’s domination of video-based social media usage had started to wane. The service’s share of U.S. consumers’ time spent using social media apps fell to 29% in the fourth quarter of 2024 from 34% in the prior-year period, according to MusicWatch. In that same time span, YouTube Shorts’ share increased from 24% to 26% and Facebook Reels improved from 16% to 18%, while the “other” category rose one percentage point to 6%, Instagram Reels was flat at 18% and Triller remained at 3%.
That coincided with an overall downward trend in social media use. The average time spent using social media apps per week dropped from 7.9 hours in the fourth quarter of 2022 to 6.5 hours in the fourth quarter of 2024, says MusicWatch principal Russ Crupnick. That’s not an unexpected trend as Americans move further past pandemic-era behaviors, but Crupnick also notes that average times will fall as older, more casual users adopt social media platforms.
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Still, that overall decrease doesn’t account for TikTok’s declining share of consumers’ attention. A few years ago, the app seemed like an unstoppable freight train as its influence spread across tech and commerce. It also became a powerful promotional vehicle for artists, many of whom launched their careers by going viral on the platform. Once TikTok proved there was an insatiable demand for short-form video, Instagram and YouTube launched copycat products with Reels and Shorts, respectively. Its impact even spread to Amazon, which launched a TikTok-styled feed for product discovery called Inspire in 2022 (Amazon announced it was shutting down the feature earlier this week). Music streaming services also followed suit: At Spotify, artists can now post short video messages to their fans.
Exactly why TikTok lost share in 2024 isn’t clear. “It’s hard to say,” says Crupnick. “Is this a function of all the political nonsense going on around the app? Is it a function of YouTube and some of the competitors catching up a little bit? Is it a little bit of exhaustion with music on social video? Or is it all three?”
Whatever the case, this reshuffling of the landscape has led artists to flock to other platforms and eroded TikTok’s dominance as a promotional vehicle. Experts who spoke with Billboard about TikTok’s decline described a changing social media landscape in which the platform remains a powerful marketing tool but has lost some of its allure and potency. For a variety of reasons, consumers are spending more time at TikTok’s competitors, and artists are thus seeing more opportunity at platforms such as YouTube and Instagram.
One factor in TikTok’s decline in market share is YouTube and Meta successfully leveraging the scale and scope of their respective platforms to become serious contenders in short-form video. YouTube, in particular, has succeeded in integrating Shorts into a platform that used to be occupied only by long-form videos. “I think YouTube has done a good job of building an ecosystem,” says J.D. Tuminski, founder of Casadei Collective Marketing Agency. “They do a lot of education for artists and labels about building the Shorts ecosystem that feeds into the bigger picture of music video content and lifestyle content.”
Jenna Rosenberg, head of operations and marketing at Gorilla Management, agrees that YouTube has benefitted by combining short-form and long-form videos. “I think when people are watching the longer videos [on YouTube] they can easily get sucked into the short-form part of that platform as well, and vice versa. Whereas TikTok, it’s literally just the vertical short-form content.”
At the same time, YouTube and Instagram are increasingly seen as friendly to creators. “Anecdotally, YouTube and Meta pay better than TikTok,” says Tuminski. “Also, the TikTok creator fund is always shifting. There are different thresholds that you have to meet to be able to earn on there, and they’re not always clear.”
TikTok, on the other hand, is seen as prioritizing some of its e-commerce initiatives. TikTok Shop, for example, allows creators to stream live videos and sell goods and merchandise. In January, TikTok Shop sales were up 153% year-over-year, far exceeding the growth rates of Chinese e-commerce platforms Shein and Temu, according to Bloomberg. While live shopping may be a sensible practice for a TikTok influencer, musicians tend to shy away from that kind of activity — and as a result, they aren’t flocking to TikTok Shop. “An artist isn’t necessarily going to go on TikTok Live and say, “Hey, come and buy my vinyl,’” says Rosenberg. “It’s just very uncomfortable for them.”
The standoff between Universal Music Group (UMG) and TikTok may also have played a part in shifting sentiment around the app in the music community. In February 2024, UMG began pulling its content from TikTok over a disagreement about compensation, among other factors. For many artists and labels, that dust-up was “a warning sign” that TikTok’s dominance in social media wasn’t secure, says Dan Roy Carter, managing director of digital consultancy Carter Projects. “Deals fell apart, carefully designed viral campaigns became eye-watering wastes of budget, and acts who had built their presence reliant on TikTok were left very much bent out of shape.”
“I think a lot of folks were looking for alternatives, even before all the political things that are going on,” says Tuminski. Artists want to work with brands they trust, he adds, and they will go where their fans are. If one service isn’t providing what they want, “they’ll go to somewhere that makes a little bit more sense to them.”
Things have worsened for TikTok in 2025 due to a pending shutdown in the U.S., although President Donald Trump provided a stay of execution when he entered office. The looming ban caused traffic to decline, however, and pushed people to download alternatives such as RedNote. As of this week, TikTok has lost one-tenth of its U.S. users since the first week of January, according to Similarweb data published by The Information.
Still, TikTok remains a powerful and influential force in music and entertainment. By 2024, a third of U.S. adults used TikTok, while almost six in 10 teens (57%) say they use the platform daily and 16% say they’re on it “almost constantly,” according to Pew Research. People use TikTok mostly for pop culture and entertainment but also viral music and dances, humor and comedy, personal stories, fashion advice, product recommendations, politics and, for 5% of U.S. adults, news.
“There is still huge value in TikTok as a platform for music discovery and promotion, and perhaps their ability to tap into merch, ticketing, and conversion to paid streaming will usher a second coming,” says Carter. “But its days of being the only horse are seemingly coming to an end.”
NFTs are back — but don’t worry about holding onto your wallet. At least in the music business, the NFT (non-fungible token) is quietly starting a second, more practical life far removed from the deafening hype that surrounded the digital assets just a few years ago.
At the beginning of the decade, some artists made millions selling NFTs while celebrities were helping legitimize them, with stars like Justin Bieber, Snoop Dogg, Madonna and Paris Hilton all buying NFTs from the then-hot Bored Ape Yacht Club collection. Then, predictably, the NFT bubble burst in fantastic fashion. In less than a year, Bieber’s Bored Ape, which he purchased for $1.3 million, was worth around $69,000.
NFTs were often a bad investment, but the underlying technology still has many believers. Last week, Sony quietly launched a music NFT collection on its Soneium blockchain platform. The fact that Sony — the larger company, not Sony Music Entertainment — is investing in Web3 technology may come as a surprise, but its efforts go back more than a year. Sony Network Communications, later renamed to Sony Block Solutions Lab, revealed in September 2023 that it had created a joint venture with Startale Labs to develop “a blockchain that can become the backbone of global web3 infrastructure” and create “killer web3 use cases to drive the adoption of web3.” Eleven months later, Sony announced the development of the Soneium blockchain that will form the infrastructure for those so-called “killer use cases,” with the goal of expanding Web3 technology and services to a broader audience and “build[ing] a world where web3 services permeate people’s daily lives.” The launch of Soneium was announced on Jan. 14.
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One of the applications on Soneium is a new fan marketing platform through which companies can issue NFTs. So far, two of Sony’s music divisions, Sony Music Entertainment France and Sony Music Publishing (Japan), issued NFTs as “demonstration experiment[s]” for its entertainment companies to “provide new value to creators and fans through web3 services.” In France, Sony celebrated the second anniversary of a Web3 community called Sunny B. 1991 by distributing limited-edition NFTs to the community. In Japan, Sony will distribute limited-edition NFTs to coincide with a live event for the girl group SANDAL TELEPHONE.
Sony’s blockchain push comes at a time when music companies are increasingly targeting superfans through digital platforms and merchandise offers. “NFTs are uniquely suited for this because they are programmable digital assets that can evolve over time,” says Cherie Hu of Water & Music, a music industry research and consulting practice. NFTs and their “smart contracts” — self-executing code on the blockchain — allow artists to create membership experiences that can evolve over time. And because NFTs use decentralized technology, they aren’t reliant on any one platform or company — a notable advantage when a country can outright ban a social media platform. “This is quite different from traditional fan clubs, where fan data is otherwise fragmented and hard to act upon from the artist’s perspective,” says Hu.
Sony’s slow launch of its blockchain ambitions will ultimately be helpful to other companies in the music space, says David Greenstein, CEO of two blockchain-related startups, Sound and Vault. “Any legacy company that’s trying to innovate, I have a lot of respect for because I think the industry needs more innovation,” he says. Three years ago, releasing high-priced yet useless NFTs was seen as innovative. In 2025, innovation means using blockchain technology, cryptocurrency and NFTs to create consumer-friendly products that bring artists and fans together.
A fresh approach to NFTs makes sense now that the market is tanking. NFT trading volume fell 19% in 2024, according to DappRadar, making it the worst year for NFTs since 2020 and far below their height in 2022, when they boasted $57.2 billion in trading volume. Last year’s leading NFT collection was Pudgy Penguins, which goes far beyond Web3 by selling plushy toys in brick-and-mortar retailers and sponsoring the uniforms of Spanish soccer club CD Castellón. Bored Ape Yacht Club NFTs still generate a relatively large amount of sales activity, but prices in the last 30 days were down about 91% from their highs in 2022.
As enthusiasm for NFTs waned, some worthwhile experiments went belly up. Universal Music Group’s foray into NFTs was Kingship, a virtual band comprised of three Bored Ape characters and a rare Mutant Ape. The 5,000 NFTs, which would unlock music and other perks for owners, quickly sold out in July 2022. The group landed a sponsorship with M&Ms in 2022 and a Kingship game launched on Roblox in 2023. But by all appearances the project is now dead, and Kingship NFTs that sold for 0.23 ETH three years ago (approximately $300 at the time) are trading for less than 0.002 ETH ($5) today.
“There’s going to be very fruitful, better things that come out of [blockchain technology] that are non-speculative, just because the technology is awesome,” says Greenstein. His latest company, Vault, allows artists to build relationships with fans and creates a blockchain-based digital wallet for each user. But Vault has made a conscious choice to put the technology in the background, and although “everything is Web3 enabled,” he says, it’s not germane to the fans’ relationship with artists. “Nobody asked what the tech stack of Spotify is,” he points out. “They just use the product.”
Sing, a Seattle-based startup that sells both digital collectibles and physical merchandise, also puts Web3 technology in the background. “We don’t talk about NFTs,” says CEO Geoff Osler. “We don’t lead with that, because I don’t think people care.” But Sing has the same end goal as early NFT proselytizers: to facilitate a relationship between artists and their biggest fans while allowing artists to realize more value from those relationships. “We think that artists should make a great deal more money than they already do on the releases,” says Osler. “And that there’s this overall feeling — at least among superfans — that there’s a gap in the market. People want to own their music and own that connection with the artists.”
Speculation isn’t gone, but it’s migrated. Blockchains like Solana that have lower transaction costs and higher speeds than Etherium have become “hotbeds” for the trading of memecoins, says Hu. Rather than pump money into NFTs, people are buying into the TrumpCoin and the Hawk Tuah coin. “In certain segments of pop culture and politics, I’d say the appetite for high-risk digital assets remains really strong,” she says.
But players in the music space seem content to focus on practical use cases and leave the speculation to memecoin hustlers. “Once we come out of this period, and people start to accept blockchain tokens, there’s some very, very interesting stuff that the technology will enable,” says Osler. “But for now, meet them where they are. Let’s sell them records from artists they love. Show them there’s this amazing digital stuff that goes along with it, and that it’s collectible, and just leave it at that.”
For two decades, the price of a music streaming service was frozen at $9.99 per month. Prices only began rising in 2022, leading to improved economics for both streaming companies and rights holders. Now, streaming platforms are closer to taking another leap forward in monetization.
The next phase of the music business, Spotify CEO Daniel Ek said during the company’s earnings call on Wednesday (Feb. 5), is tailoring experiences to “different subgroups” such as lucrative superfans. In fact, Spotify has already developed something for these subscribers, and Ek is currently testing the unnamed product. “I’m personally super excited about this one, and this is a product I’ve been waiting on for quite some time as a super fan of music,” he said. “And I’m playing around with it now, and it’s really exciting.”
Targeting superfans is part of Spotify’s current focus on launching new products. Ek called 2025 “the year of accelerated execution,” meaning the company “can pick up the pace dramatically when it comes to our product velocity.” Exactly how these new products will be monetized and ultimately impact artists and rights holders is unknown. But Alex Norström, Spotify’s co-president/chief business officer, hinted at both higher price points and an a la carte approach when he told analysts that “future tiering” and “selling add-ons to our existing subscribers” are two of the ways Spotify thinks about increasing average revenue per user.
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Recently updated licensing agreements with Universal Music Group (UMG) and Warner Music Group (WMG) also hint at the pending arrival of superfan products and additional pricing tiers. In announcing renewed deals with Spotify, both UMG and WMG cited their agreements’ ability to enable new paid subscription tiers and exclusive content bundles.
Sony Music and independent distributors and publishers have not announced a similar renewed agreement, however, and new licensing agreements with all of them would be necessary for the kind of product Spotify has described, says Vickie Nauman of digital music advisory and consultancy CrossBorderWorks. “If there is a superfan layer that is built around sound recordings, then it’s going to require licensing with revenue share between platform, publishers, labels and PROs,” she says.
Exactly what Spotify’s superfan product will look like and require from artists remains to be seen. Nauman hopes Spotify will learn from past mistakes. “I’m not sure what the killer features for a superfan might look like, but whether niche apps or DSPs, this cannot require the artist to do much if anything,” she says. “We have a long history of failure of initiatives requiring artists to post on social, port their fans to a new app and deliver custom content, and this simply doesn’t work. Artists want to be artists.”
New licensing deals also open the way for a more expensive, high-resolution audio tier which Spotify first began teasing in 2021. “Of course, the success of launching with a limited content pool depends on what’s on offer with the new service, but there’s not a big downside to launching a new service that has limited hi-res music, where the selection of music is highly likely to increase over time,” says digital music veteran Dick Huey of consultancy Toolshed. “I doubt that adding hi-res music to Spotify will be particularly controversial, in particular because they’ll bring an upsell to labels, that of higher subscription costs. Also, because other services already offer hi-res music.”
Whatever the final product, streaming services’ targeting of superfans — if history is any precedent, competitors will follow Spotify’s lead — will produce incremental revenue for Spotify and more royalties for creators and rights owners. The new additions could also help reduce artists and songwriters’ frustrations about the economics of streaming music that have plagued Spotify. As for subscribers who opt into the new offerings, they’ll get more features and artist access in return for higher fees. In short, these new iterations of Spotify should create a win-win-win for all parties in the equation.
January is not even over and 2025 already feels like a peak year for animosity toward Spotify — and that’s saying something given the criticism the company has attracted since emerging in 2008 as a potential savior for a piracy-riddled music industry. Even though music and commerce have always been uncomfortable partners in a marriage of necessity, the relationship has never been sourer.
Call it “the Spotify paradox.” Streaming — led by Spotify — has made the music business the biggest it’s been in 25 years, allowed unsigned artists to reach fans around the world, revived the popularity of local language music and enabled artists to sell their catalogs at valuations unthinkable a decade earlier — and yet discontent has never been greater. Industry revenues are soaring, but many artists and songwriters are struggling and angry.
Part of the disgruntlement can be explained by simple math. There are more songs by more artists chasing a finite amount of listeners’ attention. Spotify had a catalog of 35 million songs at the end of 2017, according to its F-1 filing. At the end of 2023 — the latest count available — Spotify had over 100 million tracks and 5 million podcasts. That’s nearly a threefold increase in catalog in just six years. And although its subscribers grew more than threefold to 236 million from 71 million over that time span, Spotify’s success at keeping its listeners engaged is such that the per-stream royalty — the metric people associate with economic health and fairness — is lower than that of its peers. (See Liz Dilts Marshall’s recent article that ranks streaming services by per-stream royalties, according to a report from catalog investor Duetti.) Global recorded music revenues have improved greatly over that time span, rising 81% to $28.6 billion in 2023 from $15.8 billion in 2017, according to the IFPI.
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But as industry revenues have consistently grown, individual artists — whose numbers are growing fast because barriers to entry no longer exist — don’t feel like they’re receiving a fair share of the bounty. Discontent is so noticeable because, in part, there are more artists to complain. Three decades ago, it required a record contract to enter the commercial music world. Today, anybody can do it. Luminate tracked an average of 99,000 new tracks uploaded to DSPs per day in 2024. That’s about 36 million new tracks competing for listeners’ attention each year. On Spotify alone, 5 million artists had a catalog of at least 100 tracks, according to the company’s latest Loud & Clear report.
Of course, per-stream payouts could be improved if Spotify encouraged people to listen less, thereby reducing the number of songs paid out from a fixed pool of money and raising the average per-stream royalty. With less music streamed, the average payout would shoot well beyond its current 0.3 cents per stream. But that would be counterproductive. In the streaming world, growth comes from keeping people engaged and, ultimately, turning them into paying subscribers. Turn away listeners and they could end up at social media platforms, where payouts are even skimpier, or broadcast radio, which pays artists and record labels nothing.
Many people see that royalties from purchases are fairer than streaming royalties, but listening and buying habits have changed how the money flows. As more people streamed more often, artists and songwriters received less money from old formats. In the fourth quarter of 2017, AM/FM radio accounted for 48% of Americans’ time spent listening to audio while streaming (including YouTube and podcasts) took a 26.5% share, according to Edison Research. By the fourth quarter of 2023, AM/FM commanded just a 36% share, while streaming (including podcasts) accounted for 45%. (Including audiobooks, which are both streamed and downloaded, that number rises to 48%.) Owned music’s share of listening — a.k.a. sales of CDs, vinyl and downloads, which fell sharply over that time span — dropped from 13% in 2017 to 4% in 2023. Also, in the streaming economy, new artists are competing for royalties with older songs. In the U.S. in 2024, catalog music (defined as more than 18 months old) accounted for 73.3% of total album equivalent consumption, according to Luminate.
Much of the discontent over Spotify, however, is less wonky and more human. The company’s actions have become widely seen as antithetical to the artists it claims to support. A turning point came in December when Harper’s ran an excerpt from Liz Pelly’s Mood Machine, a book that reveals, among other things, how Spotify bought music from nameless musicians to infuse some playlists — namely background music such as “chill” where brand names aren’t necessary — with cost-saving alternatives to professional musicians who would receive royalties for each stream. This alleged use of “fake” musicians has been reported in music circles for years, but Pelly’s book, in part because of its deep reporting and previously unknown details, captured mainstream attention rarely attained by a music industry topic that doesn’t involve Taylor Swift.
The Harper’s article, and Pelly’s ensuing book tour, spawned a flood of reviews and reaction articles about how Spotify devalues music, hurts artists, gives users a poor listening experience and is an algorithm-driven song-picker that provides its users only an illusion of choice. But the onslaught of Spotify coverage at old-school media is nothing compared to the countless videos uploaded to YouTube over the years. Enter a search phrase such as “Spotify hurts artists” or “Spotify royalties” and you can wade for hours through such topics as Spotify’s change in royalty payouts (“Spotify no longer paying artists for streams in 2024?”) and explainers on royalty accounting (“Spotify doesn’t pay artists….this is why”).
Contributing to the storm clouds was Spotify’s scheme to lower its royalties to songwriters and publishers. Last March, Spotify incensed the songwriting community when it adopted a lower mechanical royalty rate by contending its premium subscription tier’s music-and-audiobook offering qualified for a reduced royalty rate granted to bundles of digital services. Unsurprisingly, the publishing community, including numerous Grammy songwriter of the year nominees, said they wouldn’t attend Spotify’s Songwriter of the Year Grammy party, which ended up being canceled in the wake of the fires in Los Angeles. Earlier this week, a U.S. court agreed with Spotify, saying the federal royalty rules are “unambiguous” and rejecting the Mechanical Licensing Collective’s lawsuit arguing that Spotify was not actually offering a bundle of services.
Writing the biggest checks of any streaming service doesn’t get Spotify out of this paradox. This week, Spotify announced it paid $10 billion to the music industry in 2024, a tenfold increase from a decade earlier. That figure implies Spotify generated nearly 20% of the global music copyright, assuming 2024 saw an 8% increase from Will Page’s latest estimate of $45.5 billion in 2023. As Spotify’s payments to the music industry increased tenfold over the last decade, streaming’s growth helped compensate for declines in CD and download sales, and global recorded music revenues more than doubled from 2014 to 2024. But, again, aggregate industry gains don’t capture the experiences of individual artists who feel cheated by streaming economics.
Help could be on the way — someday. If it’s higher per-stream royalties artists want, then changing how royalties are calculated could make a difference. Currently, a streaming service pays royalties by divvying up all users’ subscription and advertising revenue amongst all the tracks streamed during a given month. Whether or not you listened to Taylor Swift, your subscription fees go into the same pile of money funded by Swift’s fans. An alternative method that has gained some traction is a user-centric approach that pays artists from each individual listener. Under this scheme, a listener’s subscription fees, or advertising revenue, goes only to the artists that person streamed. That’s a more favorable approach for album-oriented and niche artists and less appealing for popular songs that get repeat listens. So far, only SoundCloud has adopted the user-centric model.
Artists’ royalties also stand to benefit from efforts to clean up streaming services’ catalogs. Spotify and Deezer have signed on to Universal Music Group’s plan to reward professional musicians by demoting “functional” music and incentivizing distributors to crack down on fraud. Deezer has removed tens of millions of low-quality tracks, and anti-fraud measures may explain why the number of daily new tracks uploaded to streaming services fell about 4% in 2024, according to Luminate. But not all artists feel like they are benefiting from these changes. Spotify’s move to limit royalty payments to tracks with at least 1,000 streams was widely seen as harmful to developing artists (as seen in this column on the streaming threshold from Ari Herstand).
The Spotify paradox may never end, but artists can adjust to their new environment. In 2014, Swift’s catalog was removed from Spotify by her record label, Big Machine Label Group. Earlier that year, Swift had penned an op-ed for The Wall Street Journal that argued “music should not be free” and urged artists to “realize their worth and ask for it.” Her entire catalog returned to Spotify and other streaming platforms in 2017. Did the economics of streaming change during Swift’s three-year hiatus? No, not really. Licensing deals may have extracted marginally better terms for artists and record labels, but streaming royalties are still a fraction of a cent per stream. One thing that changed was that more of Swift’s fans became subscribers to Spotify, Apple Music (which launched in 2015) and other streaming platforms. Today, free streaming still exists, and a stream is still worth a fraction of a cent, but Swift is a case study in how to cultivate a vibrant streaming business while reviving the lost art of album sales.
Brace yourself, ultra-patriotic protectionists: English-language music from countries such as the U.S. is losing market share around the world — and even in its home markets.
Despite the U.S. owning the world’s most powerful culture machine, people in other countries want to listen to music performed in their native languages. According to Luminate’s 2024 year-end report, music from the U.S. and other English-speaking countries accounted for a lower share of global premium streams in 2024 than the prior year. The United Kingdom had the biggest drop in market share, falling 0.47 percentage points to 8.59%, while the U.S. dropped 0.44 points to 44.29% and Canada fell 0.39% to 3.34%.
In the Philippines, where English is spoken by roughly half of adults, music from the U.K. and U.S. were the biggest losers of market share while local Filipino music gained an astounding 3.32 points. In Japan, where local music has always outperformed English-language music, local music gained 1.35 points while the U.K., U.S. and Canada all lost market share. In Brazil, home to a thriving local music scene, homegrown music gained 0.78 points while the U.K. and Canada both lost market share.
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The shift away from English-language music isn’t happening only in countries where English is not the primary language. In the U.S., homegrown music lost 0.2 percentage points of market share. The same dynamic is seen in the U.K., where homegrown music lost 2.7 percentage points. In English-speaking Australia, music from Australia, the U.S. and Canada all lost market share.
So where did English-language music’s market share go? Mexico was the country of origin with the biggest market share increase in 2024, rising 0.88 percentage points to 4.69% of global premium streams. Brazil owned the second-largest increase, rising 0.33 points to 4.47%. India, which has a distinct local music market and a large diaspora, was third, increasing 0.21 points to 1.42%.
Often, a historical connection between countries could help explain the increasing popularity of one country’s music. In the U.S., music from neighboring Mexico, a major cultural influence for regions far beyond the border states, was the top gainer with an increased market share of 0.56 percentage points. In the U.K. and Australia, both members of the Commonwealth, music from another Commonwealth nation, India, gained 0.13 points and 0.16 points, respectively. Importantly, people of Indian ethnicity account for 2.9% of the U.K.’s population and 3.1 % of Australia’s population.
Local music is also thriving in France, a country not singled out in Luminate’s report. Azzedine Fall, Deezer’s direct of music & culture, says more musical genres performed in French are hitting the charts in the country. “[French-language] rap music is still dominating everywhere in the charts, but we have room for artists doing this kind of Ed Sheeran kind of stuff,” he says. “There is Pierre Garnier, for instance. He’s like the French version [of Ed Sheeran], and it’s kind of a new trend, like the return of pop rock music.” French-language rap has been popular for decades, adds Fall, but pop rock music performed in French is a newer phenomenon: “You would never hear someone doing rock in French 30 years ago.”
The rise of local music in the streaming era is a relatively new phenomenon that was described in a 2023 paper by Will Page and Chris Dalla Riva titled ‘Glocalisation’ of Music Streaming Within and Across Europe. Glocalization—a portmanteau of “global” and “localization”—explains how local music became more successful in a globalized, digital economy. In streaming’s early days, English-language music often dominated charts at the expense of local artists. In 2012, local artists accounted for less than a fifth of the top 10 songs in Poland, France, the Netherlands and Germany, according to the paper. But a decade later, local artists owned 70% of the top 10 in Poland, Italy and Sweden and 60% in France (but just 30% in the Netherlands and 20% in Germany).
The trend toward successful local music is likely to continue, says Romain Vivien, global head of music & president, Europe at Believe. The tools available to music producers “allow for more creation, faster and wider distribution to reach audiences more directly and accurately, and for a wider and more diverse artist community,” he says. It’s a perfect recipe for local labels and producers who create music in many different genres, says Vivien, “while bigger and more global structures sign fewer artists, across fewer genres and invest a lot to try to make them global stars.”
That’s not to say music from the U.S. has fallen out of favor. Artists from the U.S. still had the largest global market share of premium streams in 2024 at 44.29%, and the U.S. ranked No. 1 on Luminate’s Export Power Score, a measure of a country’s ability to export music globally. In fact, the U.K. and Canada rank No. 2 and No. 3 on Export Power Score, topping No. 4 South Korea and No. 5 Germany. The U.S. also gained market share in some places, too, albeit in primarily English-speaking countries: U.S. music rose 2.4 percentage points in the U.K. and 1.7 percentage points in Australia. English-speaking Ireland also gained share in the U.S., U.K. and Australia, likely because of Hozier’s global hit “Too Sweet” (which was the No. 8 song globally in 2024 with 1.71 billion on-demand audio streams, according to Luminate).
As in years past, English-language music also dominated the Luminate report’s lists of top albums and songs. The lone non-English language song to appear in a top 10 list was “Gata Only” by Chilean artist FloyyMenor. The track was a worldwide hit and had great success in the U.S., too, reaching No. 27 on the all-genre Billboard Hot 100 and topping Billboard’s Hot Latin Songs chart for 14 weeks in 2024 en route to ranking No. 1 on the year-end Hot Latin Songs list.
Still, the slight decline in English-language music marks a sharp contrast with present-day “America first” jingoism. Changes in music technology mean U.S. music won’t crowd out local music in other countries, and a catchy song can become popular anywhere in the world. Politicians can build a border wall, but they can’t stop music from coming in.
Though making and distributing music has become easier than ever, the number of tracks being uploaded to digital service providers has fallen — not increased — in the last two years.
In the first quarter of 2023, an average of 120,000 tracks were being uploaded to DSPs each day, up from 93,400 in 2022, according to Luminate. That number dropped to 103,500 for the full year of 2023 and fell further to 99,000 last year, according to the company’s recently released 2024 year-end report. Normally, a decrease in the amount of new music tracked by Luminate wouldn’t merit much attention. But a 4% annual decline in new tracks is notable when today’s creators have an unprecedented number of tools to make music — including easy-to-use digital audio workstations like BandLab and generative artificial intelligence apps such as Suno — and can tap into global distribution.
Music professionals Billboard spoke to for this story pointed to numerous possible explanations for the drop in new tracks, with anti-fraud measures being the most widely cited reason for the decline. Bad actors are known to upload large numbers of tracks through do-it-yourself distributors before hacking into users’ streaming accounts to stream the songs. Erik Söderblom, chief product officer for music distributor Amuse, cites Spotify’s policy changes announced in 2023 to discourage labels and distributors from uploading tracks used to inflate streaming activity for the drop. “It has been a successful way for both of them as a DSP and us as a distributor to discourage fraudulent actors who abuse the system by releasing and monetizing large volumes of audio files through artificial streams,” he says.
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Beatdapp, which can identify when users’ accounts are hijacked and turned into bot farms that unknowingly stream music, has seen fraud rates decrease on the platforms it works with, says CEO Morgan Hayduk. While a small 4% decline in the scheme of millions of new tracks suggests there’s still ample music for these bot farms to illegally stream, Hayduk believes the financial penalties are having their intended effect. “I do think the DIY space is taking their end more seriously and trying not to be a conduit for this,” he says.
French streaming service Deezer introduced an “artist-centric” royalty payout scheme in 2023 to combat fraud and prioritize professional music over “functional” music such as background noise and nature sounds. But given Spotify’s far larger user base, the platform’s anti-fraud measures get more credit for creating outcomes favorable to artists and record labels. For instance, in 2023, Spotify began levying penalties on music distributors and labels when fraudulent tracks they uploaded had been detected. As a result, experts tell Billboard, better policing at the source of the problem could have resulted in distributors being wary of working with some creators.
While the anti-fraud measures may have had the intended effect and prevented some tracks from being uploaded, DistroKid, another self-serve distributor of independent artists, actually sent more tracks to DSPs in 2024 than the prior year. “There wasn’t a decrease in tracks uploaded to streaming services through DistroKid in 2024,” a company spokesperson said in a statement to Billboard. “The average number of tracks uploaded to streaming services each day steadily increased throughout the year.”
As for other, lesser factors, a likely candidate is Spotify’s 2023 decision to set a minimum threshold for royalty payouts at 1,000 streams. The policy received mixed reactions. Some critics called the threshold a penalty for developing artists who rely on royalties to help build their careers. But cutting off payments to the outer reaches of the long tail put Spotify in sync with major labels’ recent push for royalty accounting schemes that reward professional artists at the expense of, as Universal Music Group CEO Lucian Grainge put it in 2023, “merchants of garbage.”
Ending the practice of cutting tiny royalty checks may help DSPs’ goal of prioritizing professional musicians over a sea of unwanted content, but “may also dishearten early-stage artists who struggle to grow their project,” says Söderblom. As a result, fewer uploads would mean fewer new tracks could enter Luminate’s database. Will Page, author of Pivot: Eight Principles for Transforming Your Business, believes that the payout threshold likely had “a material effect on what Luminate gets to count.” After Spotify set a threshold for payouts at 1,000 streams, an artist would experience diminishing returns from uploading more unpopular music. According to Luminate, 93.2 million of the 202.2 million tracks in its database were streamed fewer than 10 times. Page, Spotify’s former chief economist, estimates that 99% of the 99,000 new tracks in 2024 made the recording artist less than $100 in royalties last year.
Anti-fraud measures and artist-centric royalty schemes may not account for all of the decline, though. Another factor could be a natural ebb in the supply of music. Söderblom sees 2022 as “a great year for DIY” because many artists had additional time to work on new music due to the COVID-19 pandemic. “The combination of accessible music production and distribution tools and a more or less global lockdown led to a huge influx of releases,” he says. “As the world returns to normal, it seems natural to see the volume of new uploads decline.” The same could be true of video creators. Last week, MIDiA Research declared that “the pandemic-induced content creation boom has peaked” after time spent creating content such as YouTube videos dropped in the second quarter of 2024 — marking the first decline since 2021.
Similarly, the 120,000 tracks uploaded daily in 2022 may have marked a peak of musicians uploading their back catalogs to distributors. MIDiA Research’s Mark Mulligan has surveyed amateur and semi-professional creators for five years. “A lot of them are in their 40s and 50s, and probably a lot are people who have been playing in bar bands and whatever else,” says Mulligan. “And they say, ‘Oh, we’ve got these demos. Let’s put them on Spotify.’ And so, they had a lot of back catalog that hadn’t been digitized before to put up there.” Those tracks weren’t necessarily new, but they were new to DIY distributors and streaming platforms. Once the backlog runs out, these artists may not have any other recordings to distribute.
Yet another explanation is the rise of social media as a destination for new music. Music streaming platforms and DIY distribution have leveled the playing field and given every artist an opportunity to reach listeners around the world. Still, many artists have realized they aren’t the next Taylor Swift and can’t get much traction at services such as Spotify and Apple Music. Streaming can work wonders for big artists, but the promise of democratization “has lost a lot of sheen,” says Mulligan. Small artists who don’t attract a crowd at Spotify can use social media or user-generated platforms such as Audiomack to connect with listeners. “They would rather have a small fan base who they can interact with than a large audience they can’t interact with,” he says. “Add that with the remuneration issue and it’s a much less compelling premise to go on streaming now than it was three, four years ago.”
If Mulligan’s hypothesis is true, the artist-centric approach adopted by Spotify, Deezer and others could end up hurting its biggest proponents: the major labels. Streaming platforms have essentially told long-tail artists, “We’re not going to stop you from coming in, but you’re not really welcome,” says Mulligan, which he thinks could have unintended consequences somewhere down the road. “Stop a generation of artists coming in,” he says, “and there’s a really good risk that you’ll inadvertently stop a generation of fans coming in if those artists go elsewhere to build their fan bases.”
According to Morning Consult, 57% of people born roughly between 1995 to 2010 aspire to become influencers and earn a living publishing their lives — or a fictional semblance of their real lives — on platforms such as TikTok, Instagram and YouTube. That means there has never been a greater need for simple solutions to license music.
Making synch licensing simple is key to capturing the potential in today’s creator economy, says Wendy Connell, vp of marketing at music synch startup Soundstripe. “How can we guide people through this complicated process and make it as easy as possible, and make sure that they know that they’re covered, it’s legal, and take care of all the complication for them?” she says.
Soundstripe has business customers, too, and its traditional synch (film, TV and movies) rose 87% in 2024. But personal users — influencers, hobbyists, students, etc. — account for 53% of its customers. With evidence growing that content creation is big business, there’s a huge opportunity for companies like Soundstripe that provide them with services — and the need for affordable music licensing could help grow a U.S. synch revenue market that was worth $411 million in 2023 (a number that includes only label revenue tracked by the RIAA) and probably more in 2024.
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The world is awash in content creators — the term for professional, semi-professional and amateur photographers and video makers who flood digital platforms with everything from cooking tips to travel videos to Amazon product recommendations. But making short videos for a living isn’t just an aspiration of the younger generations for whom Mr. Beast is the peak of celebrity and Kim Kardashian is the blueprint for turning fame into wealth. Morning Consult also found that 41% of all adults surveyed would choose the career: Across all age groups, millions of creators already operate at the sub-career level. And a November 2023 report by the Keller Advisory Group found there were 27 million paid creators in the U.S. aged 16 to 54. For a small group of them, being an influencer provides a six-figure annual income, but for most of the 27 million “micro-influencers,” annual income is less than $10,000. Regardless of how much they make, though, influencers are churning out content — much of it requiring music.
This supply of content exists because there is a massive, eager audience for creators’ videos and photos. Young consumers are spending their time on smartphones, not TVs: 60% of American teens spend four or more hours each day on social media on average, and nearly 30% are on social platforms for more than six hours per day. Older age groups also spend time on social media — the 55-64 age group logs two hours per day on average, according to eMarketer — but younger people skew toward short-form videos on TikTok while older consumers bank most of their social time on Facebook.
In the past, TV shows and movies provided a constant source for synch royalties for the use of a sound recording and its underlying musical work. Today, those traditional synch opportunities still exist, but influencers and other content creators are eroding legacy media’s viewing time. In July, YouTube accounted for more than 10% of TV viewing, according to Nielsen, becoming the first streaming platform to surpass the 10% threshold. That was more than Netflix, a TV juggernaut that commanded an 8.4% share, and Amazon Prime, a distant third amongst streaming platforms at 3.4%. All streaming platforms accounted for 41.4% of TV viewing, well ahead of cable (26.7%) and broadcast (20.3%).
But influencers need easy-to-use, affordable licensing options to stay out of legal trouble. Last year, companies such as Marriott, Bang Energy and OFRA Cosmetics were sued by music rights holders for using unlicensed music in influencer marketing. (Sony Music and Marriott ended their lawsuit while Bang Energy lost separate court cases against Sony and UMG in 2022.) While TikTok’s licensing deals allow users to incorporate music into their videos, they stop short of allowing corporations and the influencers they — or third-party firms — hire to use music for commercial purposes. Outside of influencer marketing, there are numerous other instances of companies using music without permission when simple, legal and affordable licensing options exist.
Aside from Soundstripe, platforms such as Epidemic Sound, PremiumBeat, Artlist and, most recently, The Rights provide royalty-free music, typically through a subscription model, that provide a wide range of mostly anonymous production music, though professional musicians and songwriters working under their stage names are largely absent from these platforms. While Soundstripe currently has in-house musicians to build its catalog, Connell says the company is working on bringing in record labels’ catalogs to offer to their customers. That would benefit artists and songwriters whose music isn’t available at Soundstripe and similar platforms and who would otherwise miss out on the rise of influencer culture — and the financial benefits that can come from tapping into it.
In the ‘00s, The Smashing Pumpkins frontman Billy Corgan looked at the disruptive nature of early social media platform MySpace and saw the death of the record label. It didn’t exactly work out that way — not with MySpace, not with Facebook, not with TikTok. In fact, the major music companies became adept at using these platforms to break artists and perpetuate their market power; if there’s a breakout song on TikTok, labels rush into an old-fashioned bidding war. While social media certainly disrupted the music business, it didn’t uproot the traditional record label model.
There have been numerous other game-changers over the years that failed — on their own, at least — to radically alter how major labels do business, including independent distribution. After TuneCore launched in 2006, major labels continued to sign artists and own their intellectual property, albeit to broader “360” deals that incorporated more than recorded music rights. Nor did the advent of streaming by itself reshape the structure of major record labels. The artists with the most streaming success are involved with major labels in one way or another, be it a traditional record contract, a joint venture or, in rare cases like Taylor Swift, a distribution deal.
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Corgan may have misjudged social media’s sole impact on record labels, but he wasn’t entirely wrong about its ultimate influence. When combined, social media, independent distribution and streaming form a potent combination that has changed the balance of power and induced major labels to change how they promote music around the world. This dynamic isn’t exactly new, but it was never clearer than in 2024. This year, major labels have increasingly embraced the role of being service providers to those parties who prefer to remain independent and retain ownership of their intellectual property.
A few years ago, Universal Music Group (UMG) was pouring money into superstar acquisitions such as Bob Dylan’s and Sting’s song catalogs. More recently, the company has been focusing on its artist services model. In the last three months alone, UMG acquired indie label group [PIAS] and agreed to acquire Downtown Music Holdings for $775 million, though the proposed deal has encountered opposition from the independent music community and will need to pass regulatory scrutiny before being finalized. The company also purchased Outdustry — which has an artist- and label-services arm that focuses on China, India and other high-growth emerging markets — and bought a stake in Chord Music Partners, giving UMG distribution and publishing administration duties for the more than 60,000 songs in the investment vehicle’s catalog.
In fact, 2024 played out much like UMG CEO Lucian Grainge said it would. His January memo predicted the company would continue to expand globally and offer labels outside of mature markets a “full suite of artist services” while “acquiring local labels, catalogs and artist services businesses.” To be fair, UMG was already on that path: In 2022, it acquired m-theory’s artist services company and installed its founders, JT Myers and Nat Pastor, as co-CEOs of Virgin Music Group to expand Virgin’s independent music division globally.
Warner Music Group (WMG) appears to have sensed the shifting landscape, too, as there has been a noticeable shift in messaging during Robert Kyncl’s tenure as the company’s CEO. In the Stephen Cooper era, WMG was the music community’s leading investor in Web3 startups. In contrast, Kyncl has chosen to focus on expanding WMG’s footprint globally. WMG briefly signaled its interest in acquiring Believe in March and April after the French company announced a CEO-led effort to take the company private. Notably, Believe has a global label services business and a presence in developing markets that take advantage of the “glocalization” of local markets and global streaming platforms’ ability to help music travel across borders. WMG ultimately passed on pursuing Believe, but Kyncl has followed his peers’ interest in emerging markets, purchasing stakes in Indian companies Divo and Global Music Junction.
The service model isn’t an entirely original approach. Grainge wrote that UMG is “creating the blueprint for the labels of the future,” but UMG is doing what major music companies have always done: following trends and buying independent companies that established a particular market. Sony Music already bought into the service model with The Orchard and AWAL, the latter purchased in 2022 for $430 million. Independents such as Believe, OneRPM and Symphonic Distribution have become established players by combining distribution and artist services, while investors have poured money into independents such as Create Music Group — which this year raised $165 million at a $1 billion valuation — and gamma, which is backed by $1 billion.
But the well-established blueprint was never more of a hot commodity than in 2024. In the music business, nothing signifies the relevance of a business model like the major labels’ desire to buy it and integrate it into their systems — especially when the largest music companies feel they have no choice. The holy trinity of social media, independent distribution and global streaming platforms has given artists an alternative to the much-derided major label record contract. Artists who want to own their intellectual property and have more creative control have never had more of the tools necessary to be independent. That includes financing options, such as advances from well-funded independents or royalty advances from a new breed of financial services companies. When there’s no need for radio promotion and shelf space at brick-and-mortar retailers, the independent model looks a lot more attractive — not only for artists but for the major labels that have become increasingly keen on buying into it.
Ironically, the major labels’ acceptance of the independents’ business model means the music business is becoming less independent. Trade groups such as the Association of Independent Music and IMPALA quickly spoke out against UMG’s agreement to purchase Downtown, just as they did with Sony Music’s purchase of AWAL. U.K. regulators ultimately concluded that AWAL was a “relatively small player” and that the deal did not substantially reduce competition. Time will tell if competition watchdogs feel the same about UMG’s much larger purchase of Downtown. In any case, the independents have proved that artist and label services businesses are a good fit for the modern music business. The next step was always going to be consolidation.
For all the value derived from social media, artists and labels have yet to generate revenue directly from their activity on Facebook, Instagram and other platforms. In contrast, Weverse, a social media and e-commerce platform owned by South Korean company HYBE, changes up the typical social media dynamic by generating direct revenue from the fandom it facilitates.
This month, in an effort to generate even more revenue from superfans, Weverse introduced a digital membership tier that offers additional perks such as ad-free viewing, video downloads for offline access, high-quality streaming and language translation. The paid digital membership is separate from the fan clubs offered on the platform and Weverse’s own direct messaging feature that allows users — for a fee — to message their favorite artists.
“Digital membership, we believe, is the very first cornerstone of the future evolution” of the music business,” Weverse CEO Joon Choi tells Billboard. He adds that in the first two weeks that digital memberships were made available on the platform, 79 artists (out of 162 active artist communities on Weverse) have given fans the option of signing up for them.
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Weverse is an anomaly in social media: a platform with a small number of high-demand musicians rather than a large number of mostly unpopular artists. Launched in 2019, Weverse had 9.7 million monthly active users (MAUs) as of Sept. 30, according to HYBE’s latest financial results, down from 10.6 million a year earlier. The platform is a Swiss Army knife of a promotional vehicle. Artists not only post media content and updates but also conduct live-streams and respond — for a fee — to fans’ direct messages, while the platform additionally sells concert live streams, music and merchandise. And HYBE’s most popular artists can rack up amazing numbers on the platform: Earlier this week, BTS member Jung Kook set a Weverse record with 20.2 million real-time views of a 2.5-hour live broadcast in which he spoke to fans during a break from his military duty.
In recent months, Weverse expanded beyond K-pop artists by welcoming such Western, English-language stars as Ariana Grande and The Kid Laroi, hinting at possibilities that have record labels salivating. Goldman Sachs analysts have estimated that improved monetization of superfans — including new digital platforms, greater emphasis on vinyl buyers and higher-priced music subscription plans — could result in $3.3 billion of incremental revenue globally by 2030. Given the potential, it wasn’t surprising to hear both Warner Music Group CEO Robert Kyncl and Universal Music Group CEO Lucian Grainge express their interest in superfan products and experiences earlier this year. In September, UMG CFO Boyd Muir said the company was in “advanced talks” with Spotify about a high-priced superfan tier — something Chinese music streaming company Tencent Music Entertainment already launched with early success.
In the early days of its membership tier, Weverse is still figuring things out. “We are pioneering this field, so we see a lot of unknowns,” says Choi. For example, he says Weverse has heard from many labels that it should bundle the digital membership tier with fan clubs already offered by artists into something like a premium membership tier (of the 162 active artist communities on Weverse, 72 currently offer fan clubs). He adds that Weverse would not make the decision independently but is discussing it with labels. “Combining them together in the future, I think it’ll be stronger than what we offer right now,” says Choi.
The rollout of the membership tier hasn’t been without controversy, though. In October, an article at The Korea Herald quoted an email from Weverse to its partner record labels in which the company said participation in the membership tier is “mandatory for all artist communities hosted on Weverse.” The article also quoted a South Korean lawmaker who called on the country’s Fair Trade Commission to investigate Weverse’s “new forms of monopolistic practices and determine whether unfair treatment is occurring against affiliated companies using the platform.” Weverse says it has not been contacted or investigated by regulators.
Choi pushes back against the assertions in The Korea Herald, saying artists on the platform are not required to offer a subscription tier, in contrast with the email quoted by the newspaper. “That’s not mandatory,” he insists. In a separate statement to Billboard, Weverse said it “aims to roll out digital membership to all communities” but that the decision “is the choice of labels and artists” and, in any event, fans will still be able to use many existing Weverse services for free. Despite Weverse playing an integral role in the marketing and promotion of K-pop artists, Choi argues it doesn’t have enough market power to make such demands: “We are not in a dominant place where we can just present the policy and dictate our policy to the artist or labels however we want.”
Weverse has also received criticism for its revenue-sharing splits with labels, with The Korea Herald additionally citing an anonymous source as saying the company proposed a “disproportionate” share of the revenue ranging from 30% to 60%, leaving the artist and label with anywhere from 40% to 70%. Choi declined to comment on the business arrangements that determine how much subscription revenue Weverse keeps but noted the platform is investing money into the subscription tier to create features valuable to artists and their fans.
The pushback encountered by Weverse foreshadows the challenges platforms and labels will face as superfan platforms proliferate and the stakeholders wrangle over how the money will be shared. Labels and publishers have spent decades trying to get more value from streaming services, and short-form video apps like TikTok necessitated new conversations about how to compensate creators for the value they bring to the platform. As Choi says, “What we’re doing is basically creating a new value by connecting the artist and super fans in the same place.” In the process, HYBE has pioneered a new model that could become standard practice for artists and labels in the music business of the future.
A year ago, SiriusXM launched a new streaming app filled with original and licensed content from its satellite radio service and set the price at $9.99 — far below the roughly $16 average monthly revenue it takes in per satellite subscriber. The hope was that a relatively affordable price and an improved app would help SiriusXM reach younger consumers and expand beyond its core in-car satellite radio listeners.
The new app was “just the beginning,” CEO Jennifer Witz said at the time, adding that SiriusXM would “continue to iterate and develop our product offerings throughout the next year and beyond as we strive to deliver our subscribers the best listening experience on the go, in the car, and wherever they choose to tune in.” The company’s satellite radio business was built on vehicles. If you buy a new or used car, you’ll likely get a free SiriusXM trial that’s extremely effective at convincing people to subscribe once their trial is over. The new streaming app was intended to attract people who would listen outside of the car.
But selling the radio experience in a smartphone app didn’t go well. As it turns out, the streaming app hasn’t produced a good return on marketing spending, Witz said on Tuesday (Dec. 10). Appearing at the UBS Global Media and Communications Conference, the executive cited “slow progress” in turning free trials into long-term retention. As a result, SiriusXM has already cut back its marketing spend on the app and expects to have fewer streaming trials — and thus fewer subscribers — in the future. That was a worse assessment than what Witz delivered on SiriusXM’s Aug. 2 earnings call. At that time, when asked about conversion rates for the app, Witz said they had been “challenged” but maintained positivity, adding that there had been some “positive results” with first-time trial adopters and that the company was “confident” it could attract “a different audience” that will be “incremental” to the existing car-based business.
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Now, after its underwhelming experiment with the app, SiriusXM will, in Witz’s words, be “leaning into our strengths.” In other words, the company is putting its focus back on satellite radio and the in-automobile listening experience. In alignment with that strategy, the company also announced the departure of Joseph Inzerillo, the chief product and technology officer who played an instrumental role in the app’s launch.
For all the strengths of the app — curated stations, celebrity musician stations, a smorgasbord of audio programming — the company gave up its competitive advantage when it tried to compete outside of satellite radio and the automobile. After all, the company is the lone satellite radio operator and, given the cost and complexity of launching satellites into orbit, has the market to itself. But when leaving the safety of satellite, it’s hard to beat Spotify, Apple Music, YouTube and Amazon Music at their own game. These are streaming-native platforms built for consumers’ desire for interactivity, while SiriusXM’s app attempts to fit a one-way satellite radio experience into a two-way, interactive medium. In the end, paid radio turned out to be a tough sell to a generation that has grown up on on-demand streaming.
So, SiriusXM is going to focus on what it does best, and in-car listening gives the company a huge audience to work with. It currently has 33 million subscribers and, according to MusicWatch’s Russ Crupnick, reaches 65 million total listeners. In an email to Billboard, radio consultant Andy Meadows said he believes “SiriusXM is better suited to compete for those coveted in-car listeners so [Tuesday’s announcement] makes sense from that standpoint.” Crupnick also sees in-car listening as a point of strength for SiriusXM, pointing to the uniqueness of the SiriusXM product as a distinct advantage. “The ease of use, breadth of content, and curation position them as far superior to terrestrial radio, and in a different place than music streaming or podcasts,” he says.
Building on in-car satellite listening, the SiriusXM streaming app will become more of a complementary product. “There is real opportunity with 360L,” said Witz on Tuesday, referring to the company’s in-car platform that serves as a dual satellite radio/streaming product. Because 360L includes streaming, it allows SiriusXM to serve personalized — a.k.a. more lucrative — ads and provide more targeted — a.k.a. more expensive — ads for advertisers. Of the app, she said it can provide data that helps SiriusXM determine spends on programming that resonates with listeners, given that satellite receivers are a one-way technology that doesn’t provide granular insights into listening behaviors. Similar to 360L, the app can also provide targeted advertisements.
For customers, bundling satellite and streaming costs as low as $25 per month. That’s about double the cost of an individual Spotify subscription, but SiriusXM subscribers can withstand the price. According to Witz, platinum satellite subscriptions, which cost upward of $29 per month, account for “about a third” of the current subscriber base. And providing the best of satellite and streaming will help SiriusXM compete with a “newer breed of streaming products” on Americans’ car dashes, says Meadows. “Anything SiriusXM, and traditional radio for that matter, can do to look, sound and function better across all devices is in their best interest long term.”