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The music industry has undergone two paradigm shifts since the turn of the century. The first was spurred by platforms like iTunes, which launched in 2003, and other digital-download programs. This disruption led to physical album retailers such as HMV having to downsize significantly, with some such as Tower Records in the US going bankrupt. We are currently in the midst of the second shift, which is being caused by the rise in streaming services such as Spotify and Apple Music. But what will this mean for the businesses, labels, and artists who are affected?
These days you’re hard pressed to find someone who doesn’t use a music streaming service (apart from the one friend who insists vinyl records sound better), and it’s quite clear why. For a relatively low price (£5 per month for students using either Apple Music or Spotify premium), you can access a catalogue of music to rival any record store. The services aren’t just limiting themselves to music either, now you can find podcasts, videos, and soon even audiobooks all at your fingertips. This ease of use combined with so many people having a device on them at all times makes it no wonder that Spotify recently announced that they had achieved a total of 70 million paid subscribers. This is an increase in 10 million over the last 6 months, and if you add in non-premium users the service has over 140 million subscribers.
This explosion in popularity, combined with the increase in connectivity between so many aspects of our lives, from phones to computers to cars, has led Honeycomb Asset Management to predict that streaming music will be a replacement for terrestrial and satellite radio. This is certainly a realistic prospect. In the age of convenience we often take the path of least resistance when deciding between competing products and services. This is the reason for the rise of Uber, Deliveroo, and even Tinder, rather than their traditional, more long-winded counterparts. The convenience of streaming is one of the reasons the music industry has seen a revival in growth recently, as it is easier than pirating and for many seen as more than worth the money. Long gone are the days of Limewire and Napster.
As it currently stands however, radio can hold its own against music streaming. For one, it’s far easier to switch on the radio and have the songs chosen for you than it is to unlock your phone and choose a playlist or search for an artist. Another advantage radio has is that it is often broadcasted live. This means it can give local traffic and news updates as and when they happen, giving radio the edge over streaming when it comes to convenience. But with the advent of smart technology such as Amazon Echo and Google Home, which can provide up to date information and news as well as controlling your music library, a future where these technologies are integrated into cars is easy to imagine, and may spell disaster for radio.