The music streaming era is entering a new phase
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The music streaming era is entering a new phase. For years, platforms prioritized growth by offering low-cost access to all the music in the world, resulting in over 2 billion global users and 740 million paying subscribers. But growth is slowing, especially in the West, where U.S. subscriber growth has dropped from nearly 29% in 2019 to less than 6% in 2023. As we approach market saturation, streaming platforms are shifting focus from expansion to profitability.
Key changes are already underway. Price hikes have become a norm after years of stable rates, and platforms are pushing free users to pay, with premium subscribers now valued 13x more than free users. Limited free trials, paywalled features, and lower-cost ad-supported tiers are becoming standard. We’re also seeing the end of one-size-fits-all plans, with new subscription tiers like music-only or audiobook-only options, as well as the potential for artist-specific subscription models offering exclusive content.
Revenue models are evolving as well. Platforms like Spotify are turning listener attention into a product, charging artists and labels for visibility with tools like Marquee and Showcase. In this “two-sided marketplace,” artists become customers, and fans become products to be monetized. Meanwhile, cost-cutting measures are impacting artist royalties, as platforms reclassify premium tiers and push for lower payouts to make their models more profitable.
This marks the beginning of a new streaming era, with platforms tightening their belts to prioritize profitability over growth. While some changes could hurt the user experience, others may offer opportunities for deeper fan engagement and artist support. The challenge will be finding the balance between delivering value to both fans and artists without sacrificing the core of what made streaming popular in the first place.
Key changes are already underway. Price hikes have become a norm after years of stable rates, and platforms are pushing free users to pay, with premium subscribers now valued 13x more than free users. Limited free trials, paywalled features, and lower-cost ad-supported tiers are becoming standard. We’re also seeing the end of one-size-fits-all plans, with new subscription tiers like music-only or audiobook-only options, as well as the potential for artist-specific subscription models offering exclusive content.
Revenue models are evolving as well. Platforms like Spotify are turning listener attention into a product, charging artists and labels for visibility with tools like Marquee and Showcase. In this “two-sided marketplace,” artists become customers, and fans become products to be monetized. Meanwhile, cost-cutting measures are impacting artist royalties, as platforms reclassify premium tiers and push for lower payouts to make their models more profitable.
This marks the beginning of a new streaming era, with platforms tightening their belts to prioritize profitability over growth. While some changes could hurt the user experience, others may offer opportunities for deeper fan engagement and artist support. The challenge will be finding the balance between delivering value to both fans and artists without sacrificing the core of what made streaming popular in the first place.