Product Code Database
Music streaming services are a type of online streaming media service that focuses primarily on music, and sometimes other forms of digital audio content such as Podcast. These services are usually subscription-based services allowing users to stream digital copyright restricted songs on-demand from a centralized library provided by the service. Some services may offer free tiers with limitations, such as advertising and limits on use. They typically incorporate a recommendation system to help users discover other songs they may enjoy based on their listening history and other factors, as well as the ability to create and share public Playlist with other users.
Streaming services saw a significant pace of growth during the 2010s, overtaking Music download as the largest source of revenue to the United States music industry in 2015, and accounting for a majority since 2016. As a result of their ascendance, streaming services (as well as music-oriented content on video sharing platforms) were incorporated into the methodologies of major Record chart; the "album-equivalent unit" was developed as an alternative metric for the consumption of albums, to account for digital music and streaming.
Consumers moving away from traditional physical media towards streaming platforms attributed convenience, variety, and affordability as advantages. On the contrary, streaming has also been criticized for causing performers to earn less from their music and artistry compared to physical formats (which can be as low as one-tenth of a cent per steam).
In 1999, MP3.com launched "My.MP3.com", a feature which allowed users to Ripping and upload music files from CDs they owned into a personal library via its "Beam-it" software, which they could then stream via their accounts. In 2000, the service was the subject of a lawsuit by Universal Music Group, UMG Recordings, Inc. v. MP3.com, Inc., which ultimately ruled that the service allowed for the unauthorized distribution of Copyright sound recordings. Although users were required to acknowledge that they owned the music, it was not practical to verify. The lawsuit proved detrimental to MP3.com: it would be sold to UMG's parent company Vivendi Universal in May 2001, and sold to CNET in November 2003, which shut down its music distribution platform in December 2003.
In December 2001, Rhapsody was launched by the startup Listen.com, becoming the first service to offer subscription-based streaming access to a library of music online.
/a> Initially limited to content from independent labels such as Naxos, it later reached agreements to stream music from the "big five" major labels. In 2003, Roxio acquired both the online music store PressPlay and the intellectual property of Napster, and used their assets assets to launch "Napster 2.0"—an online music store and subscription music streaming platform.
Pandora Radio launched in 2005; the service initially allowed users to create and listen to internet radio stations based on categories such as genres, which could then be personalized by giving Like button ratings to songs and artists the user liked or disliked. The service's recommendation engine, the Music Genome Project, analyzes and determines songs based on various traits. Pandora initially operated within the royalty framework enforced by SoundExchange for internet radio in the United States, resulting in operational limitations: users could not choose individual songs to play on-demand, and could only skip a limited number of songs per-hour (although users could later receive more skips by watching video advertisements). In 2008, the company joined with other internet radio companies to protest proposed rate changes by SoundExchange.
Yahoo! acquired Launch Media and its LaunchCast internet radio platform in 2001 amid the dot-com bubble; in 2005, the service evolved into Yahoo Music, a subscription service that allowed songs to be streamed in DRM-protected Windows Media Audio (WMA), and purchased for an additional fee.
Web 2.0 services led to new avenues for music streaming: YouTube would become a prominent platform for Music video, and eventually displaced music television as their main distribution outlet. MySpace allowed musicians to publish songs to stream on their respective pages, as well as interact and engage with their fans.
In 2006, a French music streaming website known as Blogmusiq was shut down after copyright complaints by the local royalty agency SACEM. After reaching agreements with SACEM, the site subsequently relaunched as Deezer, which reached seven million users by the end of 2009.
MTV owner Viacom partnered with Microsoft on an online music platform known as Urge, which included a music store, music videos and online radio stations, and a subscription music streaming service known as "Urge To Go". Urge was briefly integrated with Windows Media Player as a competitor to Apple's iTunes and iTunes Store, but was discontinued in 2007 amid cannibalization by Microsoft's Zune platform (which was positioned as a competitor to iPod, and used its own separate DRM and music store that was incompatible with Urge). Viacom then entered into a partnership with Rhapsody owner RealNetworks to form the joint venture Rhapsody America, and transition Urge subscribers to Rhapsody. Yahoo Music Unlimited was discontinued in July 2008, and Yahoo also directed users to Rhapsody.
In the 2010s, online streaming gradually had begun to displace radio airplay as a significant factor in the commercial success of music. Spotify officially launched in the United States in 2011, and Billboard began to increasingly include streams into the methodologies of its Record chart. In 2012, Psy's K-pop song "Gangnam Style" became a major international hit, driven primarily by the Viral video popularity of its music video; "Gangnam Style" would become the first YouTube video to reach one billion views. "Harlem Shake"—a song by Trap music producer Baauer that had become associated with a viral dance meme—was boosted to number-one on the Billboard Hot 100 chart in February 2013 after U.S. YouTube views for music content were added to its methodology.
After Spotify's launch, new competing services began to emerge in the North American market, including Beats Music—which was backed by headphone maker Beats Electronics, Microsoft Groove Music (formerly Xbox Music), Amazon Music, and Google Play Music All-Access (a branch of a service also offering downloads and a music locker). Beats Electronics was later acquired by Apple Inc., which discontinued Beats Music in 2015 and replaced it with a new Apple Music service. Tidal launched in 2015 with backing from rapper Jay-Z, emphasizing high-fidelity audio and exclusive releases.
In October 2015, after initially offering "Music Key"—a subscription bundling Play Music All Access with ad-free viewing of music content on YouTube, Google launched YouTube Premium— which extended ad-free access to all videos on the platform, and added premium original video content in an effort to compete with services such as Netflix. Concurrently, YouTube introduced YouTube Music, an Mobile app dedicated to music content on the platform. In 2016, Rhapsody was renamed Napster; Rhapsody had acquired Napster in 2011.
In 2017, Pandora launched a "Premium" tier, which features an on-demand service more in line with its competitors, while still leveraging its existing recommendation engine and manual curation. In October 2017, Microsoft announced the discontinuation of Groove Music Pass, and directed its users to Spotify.
In 2018, YouTube Red rebranded as YouTube Premium, and YouTube concurrently introduced a redesigned YouTube Music platform, along with a separate YouTube Music subscription at a lower price point. The YouTube Music platform can be used without a subscription, but carries video advertising, and does not support background playback on mobile devices. The YouTube Music service eventually replaced Google Play Music entirely in 2020, and Google no longer operates a digital music store.
In 2019, Beatport, an online music store primarily targeting DJs and electronic music, announced music streaming services known as Beatport Cloud and Beatport Link. The latter is designed to integrate directly with DJ software such as Serato, Rekordbox, Traktor, and its first-party web application Beatport DJ (which launched in 2021); the service targets professional DJs shifting to streaming-based models for their music libraries, as well as amateur DJs.
Music streaming services have faced criticism over the amount of Royalty payment they distribute, including accusations that they do not fairly compensate musicians and songwriters. In 2013, Spotify stated that it paid artists an average of $0.007 per stream. Music Week editor Tim Ingham commented that while the figure may "initially seem alarming," he noted: "Unlike buying a CD or download, streaming is not a one-off payment. Hundreds of millions of streams of tracks are happening every day, which quickly multiplies the potential revenues on offer – and is a constant long-term source of income for artists." Amidst those rising number of streams, Spotify has also confirmed that they will require tracks "to get a minimum of 1,000 listens every year to receive royalties" starting early 2024. Additionally, some have expressed concern about the focus of streaming metrics as the primary source of monetary compensation for musicians and songwriters as streaming fraud gains traction.
When music services already face critiques for taking large cuts from artists, some say their business models help record labels profit even more. Streaming services take the revenue from songs on their platform and send it back to record labels and management companies that own the rights to the songs. These companies then take another cut before sending it to the artists. However, in the past, there were ‘royalty models’ that would allow for artists to get a share of physical albums sold, but with the creation of streaming services, those models have now become obsolete. This is the case for smaller artists, who take up a large portion of the music industry. Without an extensive fan base, these artists aren't able to make a sufficient amount of money.
To increase the diversity and value of their services, music streaming services have sometimes produced or acquired other forms of music-related content besides songs, including music documentaries and concert presentations. Spotify had begun to increasingly make investments into Podcast, buoyed by acquisitions such as sports publication The Ringer and exclusive rights to The Joe Rogan Experience.
In the 2010s, Record chart began to increasingly include listener data from streaming platforms into their methodologies. In March 2012, Billboard launched a new "On-Demand Songs" chart, which was added to the formula of its flagship Hot 100 chart. In January 2013, On-Demand Songs was broadened into "Streaming Songs", and YouTube views in the United States on videos containing music were added to the Hot 100 formula the following month. In 2014, the UK Singles Chart similarly changed its methodology to include streaming. To account for streaming and the decline of album purchases, album charts began to adopt a metric known as "album-equivalent units" (AEUs), which are based on purchases of the album, and how many times individual songs from the album have been purchased or streamed. In 2016, the GfK Entertainment charts in Germany also added streaming to its methodology; however, the metric is based on revenues generated from a song's availability on paid platforms only, thus excluding free ad-supported services.
Streaming services have led to new types of promotional strategies for music releases; in 2016, Kanye West received attention for making multiple updates to his album The Life of Pablo on streaming services following its initial release (including mastering tweaks and, eventually, a new song), with Jayson Greene of Pitchfork comparing it to Software update to Software. In several prominent cases, artists have temporarily replaced the Album cover of their existing discography to tease an upcoming release, such as Dua Lipa replacing her albums' cover art with Kaleidoscope versions to tease "Houdini", Doja Cat replacing her cover art with red-tinted versions to tease Scarlet, and Charli XCX promoting Brat by replacing the cover art of her past releases with versions mimicking the design of the Brat cover.
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