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Streaming Audio - US - October 2018

“The competitive landscape for streaming audio is fairly level in terms of service offerings, but a few standouts have dominated through partnerships with other services and easy access to extensive libraries. Paid streaming apps likely find that their biggest competition is the free version they offer – finding ways to convert subscribers may be a challenge.”

– John Poelking, Leisure & Media Analyst

This report examines the following issues:

  • Justifying a paid subscription 
  • Free listening is too easy 
  • Getting streaming services to be part of the routine

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Figure 1: Total US streaming revenue, 2014-17
        • The issues
          • Justifying a paid subscription
            • Figure 2: Paid services, August 2018
          • Free listening is too easy
            • Figure 3: Attitudes toward free listening, August 2018
          • Getting streaming services to be part of the routine
            • Figure 4: Frequency of audio service use, August 2018
          • The opportunities
            • Streaming audiences have distinct demographics
              • Figure 5: Listening services used, by key demographics, August 2018
            • Emphasizing large libraries
              • Figure 6: Reasons to pay, August 2018
            • Reaching listeners on the go
              • Figure 7: Devices used, August 2018
            • Strong support for the artists
              • Figure 8: Attitudes toward ethical listening, August 2018
            • What it means
            • The Market – What You Need to Know

              • Streaming category is strong
                • Music growth dependent on streaming
                  • Media landscape favors consolidation, videos
                    • More opportunities online and offline
                    • Market Size

                      • Streaming revenue growing exponentially
                        • Figure 9: Total US streaming revenue, 2014-17
                    • Market Breakdown

                      • Streaming dominates music revenue
                        • Figure 10: US music industry revenues, by share of sector, 2017
                      • Music subscriptions
                        • Figure 11: US paid music subscription revenue, 2014-17
                        • Figure 12: Number of US paid music subscribers, 2014-17
                      • Streaming radio
                        • Figure 13: US digital and customized radio revenue, 2014-17
                      • Digital downloads
                        • Figure 14: US digital downloads revenue, 2014-17
                    • Media and Music

                      • Major acquisitions shaping media landscape
                        • Shopping, videos dominate online activity
                          • Figure 15: Conduction of digital activities, December 2017
                        • Media apps under essentials and social media
                          • Figure 16: Types of apps used in last 30 days, January 2017-March 2018
                      • Market Perspective

                        • Concerts boom as music landscape shifts
                          • Rise of smart tech
                            • One in five say social media is their main form of entertainment
                              • 5G networks to boost mobile capability
                                • Heavy investments in online advertising
                                • Key Players – What You Need to Know

                                  • Streaming players use similar strategies
                                    • Shortening the distance between service and listener
                                      • Protecting artists’ rights
                                        • Platforms to help the artists
                                        • Leading Players

                                          • Spotify
                                            • Apple Music
                                              • Amazon Music
                                                • Pandora
                                                  • SoundCloud
                                                    • iHeartRadio
                                                      • Tidal
                                                        • Google Play
                                                          • YouTube Music
                                                            • Figure 17: Google “YouTube Music” mobile advertisement, July 2018
                                                        • What’s Working?

                                                          • Partnering with networks for greater access
                                                            • Figure 18: Sprint “Introducing Unlimited Plus” email, July 2018
                                                          • Cross-entertainment partnerships and promotions
                                                            • Getting baked into platforms
                                                              • Using less data to stream
                                                                • Emphasizing the playlist for discovery
                                                                • What’s Struggling?

                                                                  • Artists could be losing out
                                                                    • Figuring out what kind of content to allow
                                                                    • What’s Next?

                                                                      • Push for open access in streaming
                                                                        • More investment in the niche
                                                                          • Direct licensing to cut out record labels
                                                                            • Get podcasts to fit in
                                                                            • The Consumer – What You Need to Know

                                                                              • YouTube dominates listening services
                                                                                • Most listeners not paying
                                                                                  • More access, few ads important for paid users
                                                                                    • Free listening is too easy
                                                                                      • Subscriptions are the path of least resistance
                                                                                        • Mobile experience essential to streaming
                                                                                          • Seeking relics in a digital age
                                                                                            • Pay the artists
                                                                                              • Emphasizing the benefits of streaming
                                                                                              • Services Used

                                                                                                • Key opportunity
                                                                                                  • Free services still most popular
                                                                                                    • Figure 19: Listening services used, August 2018
                                                                                                  • Streaming services not as habitual as traditional radio
                                                                                                    • Figure 20: Frequency of audio service use, August 2018
                                                                                                  • Key demographics show opportunity for streaming music
                                                                                                    • Figure 21: Listening services used, by key demographics, August 2018
                                                                                                • Paid Services

                                                                                                  • Key opportunity
                                                                                                    • Two thirds of adults don’t pay for music
                                                                                                      • Figure 22: Paid services, August 2018
                                                                                                    • All it takes is one
                                                                                                      • Figure 23: Number of paid services, August 2018
                                                                                                    • Most people taking the free option if available…
                                                                                                      • Figure 24: Paid service among all users of service, August 2018
                                                                                                    • …but upgrades do happen
                                                                                                      • Figure 25: Attitudes toward upgrading service and using other accounts, August 2018
                                                                                                    • Digital downloads still relevant
                                                                                                      • Figure 26: Digital download purchases, August 2018
                                                                                                  • Reasons to Pay

                                                                                                    • Key opportunity
                                                                                                      • Song selection is key
                                                                                                        • Figure 27: Reasons to pay, August 2018
                                                                                                      • Accessibility important to Hispanic listeners
                                                                                                        • Figure 28: Reasons to pay – Select items, by Hispanic origin, August 2018
                                                                                                      • SoundCloud, Apple dominate discovery
                                                                                                        • Figure 29: Influence of new content, by service used, August 2018
                                                                                                    • Barriers to Payment

                                                                                                      • Key opportunity
                                                                                                        • Listening for free is just too easy
                                                                                                          • Figure 30: Barriers to payment, August 2018
                                                                                                        • Young listeners can get what they need already
                                                                                                          • Figure 31: Barriers to payment – Select items, by age, August 2018
                                                                                                      • Subscriptions

                                                                                                        • Key opportunity
                                                                                                          • Narrowing options can help get subscriptions
                                                                                                            • Figure 32: Attitudes toward subscriptions, August 2018
                                                                                                          • Parents looking for convenience
                                                                                                            • Figure 33: Attitudes toward subscriptions, by parental status, August 2018
                                                                                                        • Devices Used

                                                                                                          • Key opportunity
                                                                                                            • Phones are just as popular as the car stereo
                                                                                                              • Figure 34: Devices used, August 2018
                                                                                                            • Young adults need interaction, older attracted to tradition
                                                                                                              • Figure 35: Devices used – Select items, by age, August 2018
                                                                                                            • Services to listen to on the go
                                                                                                              • Figure 36: Mobile devices used, by services used, August 2018
                                                                                                          • Listening Behaviors

                                                                                                            • Key opportunity
                                                                                                              • Old habits die hard
                                                                                                                • Figure 37: Behaviors regarding traditional listening, August 2018
                                                                                                              • Discovery and offline listening may not be crucial
                                                                                                                • Figure 38: Listening to discover, August 2018
                                                                                                              • Young adults listening to learn
                                                                                                                • Figure 39: Listening to discover, by age, August 2018
                                                                                                            • Ethical Listening

                                                                                                              • Key opportunity
                                                                                                                • Listeners want to do right
                                                                                                                  • Figure 40: Attitudes toward ethical listening, August 2018
                                                                                                                • Young men care more about the artists than the service
                                                                                                                  • Figure 41: Attitudes toward ethical listening, by gender and age, August 2018
                                                                                                              • Attitudes toward Streaming

                                                                                                                • Key opportunity
                                                                                                                  • Passive recommendations important to listeners
                                                                                                                    • Figure 42: Attitudes toward listening recommendations, August 2018
                                                                                                                  • Balancing the old and the new
                                                                                                                    • Figure 43: Streaming preferences, August 2018
                                                                                                                  • Young adults get the most out of streaming
                                                                                                                    • Figure 44: Attitudes toward streaming – Select items, by age, August 2018
                                                                                                                  • Black, Hispanic listeners streaming more than anything
                                                                                                                    • Figure 45: Attitudes toward streaming – Select items, by race and Hispanic origin, August 2018
                                                                                                                  • Mobility important for urban listeners
                                                                                                                    • Figure 46: Attitudes toward streaming – Select items, by living area, August 2018
                                                                                                                • Appendix – Data Sources and Abbreviations

                                                                                                                  • Data sources
                                                                                                                    • Sales data
                                                                                                                      • Consumer survey data
                                                                                                                        • Direct marketing creative
                                                                                                                          • Abbreviations and terms
                                                                                                                            • Abbreviations
                                                                                                                              • Terms

                                                                                                                              Streaming Audio - US - October 2018

                                                                                                                              £3,435.47 (Excl.Tax)