Apple's upcoming revamped
Music service may be coming at the perfect time, right as
Revenue From Streaming Music is beginning to surpass
Revenue From digital downloads.
Streaming Music Services have been growing in popularity over the last several years, and in an
earnings call today (via
Re/code),
Warner Music Group CEO Stephen Cooper told investors that for the first time, the company
Earned More Revenue From Streaming Music Services Than From digital downloads.
Warner Music Group saw a 33 percent increase in its
Revenue From Streaming Music Services From companies like Spotify and YouTube during the second quarter of 2015, while
Revenue From digital
Downloads like those
From iTunes grew only seven percent. During the call,
Cooper said that the growth of
Streaming Music makes it "abundantly clear" that in the future, "streaming will be the way that most people enjoy music."
"We experienced significant Revenue growth this quarter across key segments of our business -- in particular Recorded Music, across the U.S. and international and across digital and physical -- capping off a strong first half of our fiscal year" said Stephen Cooper, Warner Music Group's CEO. "**tably, in this quarter we saw continued growth in Streaming Revenue which surpassed download Revenue for the first time in the history of our recorded Music business. Our commitment to being at the forefront of industry change as well as our ongoing investment in artist development is the foundation of our continued success."
Warner
Music Group says that it expects
Streaming growth will continue, and it believes that declines in download
Revenue will be "a continuing trend." Apple too has seen a stark decline in digital
Revenue in recent years, with sales dropping
5.7 percent in 2013 and
further declining 13 percent worldwide in 2014.
A decline in iTunes
Music sales may have been one of the major factors that spurred Apple to purchase Beats Music, giving it a foothold in the
Streaming Music market that it was late to enter. Apple has seen some criticism for its failure to embrace
Streaming Music early on and the somewhat lukewarm reception of iTunes Radio.
Beats
Music has failed to draw a significant number of customers away
From Spotify, which has 60 million subscribers, of which 15 million pay for the premium service, but with
More Than 800 million credit cards on file, Apple's upcoming revamped
Streaming Music service has the potential to overtake competing services.
Rumors have suggested that the new service will be similar to the existing Beats
Music service, but with a focus on exclusive content and deep integration into iTunes and Apple's iOS
Music app. It will be priced at $9.99 and ** freemium tier will be offered, but Apple is looking at ways to
offer music for free, through lengthy trial periods, iTunes Radio, and possibly a SoundCloud-like
Music sharing platform.
Apple is said to be planning to
unveil its new music service in June at the Worldwide Developers Conference.
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