How the music industry has handled music streaming

Soucre: Amazon

The economic principle I’m exploring is “ Because of scarcity, people choose. All choices have an opportunity cost.”

 My research question to help me study the economic principle is “How have music streaming services affected music consumption?”

 The article published in Billboard titled “2018 NIELSEN MUSIC REPORT: STREAMING KEEPS THE BIZ SOARING: A fourth straight year of growth means the industry renaissance continues” demonstrates this economic principle by showing that rising digital sales have outweighed falling physical CD sales resulting in a overall increase in the total music industry.

 First, as expected music streaming has become even more popular in 2018. It grew about "a whopping 42.6 percent increase from 631 billion streams in 2017." This means that more and more people are going from the more traditional forms like iTunes to the virtually free streaming platforms, like Spotify. People would rather save a few more bucks buying a premium membership each month than buy each individual single or album they want.

 Second, other forms of music have fell to compensate the massive growth of music streaming. Digital album sales have fell 20.7%, digital single sales have fell 27.2%, and CDs have fell 20.9%. However, vinyl sales rose 14.6%. I think this is because less people are buying music they want because they can get it with streaming services easier and at a net lower price.

 Third, despite these changes, the music industry has still grown as a whole. Even with the dramatic shift to music streaming services "Universal Music Group grew two percentage points to 38.66 percent in distributor market share to lead the industry." This shows that the music industry isn't just going downhill but is growing despite the drastic change to a different medium.

 In my next blog post I will research the question: What legal repercussions do streaming services have to face when dealing with the music industry?