Fans That Pay vs. Fans That Don't...

Digital Music News just released a fantastic article discussing the comparison of music fans that use streaming free streaming platforms and music fans that pay for their music content.

The Recording Industry Association of America (RIAA) confirmed this past week that vinyl records have surpassed the revenue garnered by free, ad-based streaming users. Digital Music News claims that this "is less of a reflection on how much money vinyl is making, [but more of] of a reflection of just how little money ad-supported music streaming actually generates."

The site claims that 94% of all music streaming users are streaming on free, ad-supported music platforms. The juxtaposition, however, is that these users only create 24% of the revenue. These percentages are depicted in the charts below:

This picture was taken from the Digital News Music website

Digital Music News then shared how they created theses estimates. They broke down their methodology into three strategic, specific sections.

I. "Total, paying streaming music users."

The International Federation of Phonographic Industries (IFPI) calculated that there are currently 41 million paying, on-demand streaming subscribers. They also took into account the number of subscribers on each popular platform. These included: Spotify (30 million paying), Tidal (1 million paying), Apple Music (11 million paying), Deezer (approx. 3 million paying). This number, added to the number of paying users of unpopular platforms, brings the total to 50 million.

II. "Revenues from paying subscribers"

The RIAA estimated $1.219 billion of revenue from average paid subscriber base (10.8 million). When you apply that number to 50 million, the revenue increased to $5.643 billion.

III. "Estimated free streaming users."

What I love about this section is that Digital Music News was very transparent about the "liberal assumption" of the following estimates:

• YouTube: I billion estimate users, with 40% of content related to music or music videos.

• Spotify: estimated 50 million free users

• Tidal, Apple Music: 0 free users

• SoundCloud: self-reported 175 million active users

*All figures from http://www.digitalmusicnews.com/2016/03/29/the-difference-between-paying-streaming-music-fans-free-streaming-music-fans/

*https://www.riaa.com/

*http://www.ifpi.org/