1. What Effect Did Streaming Services Have On The Music Industry From 2016-2017?

Ask any executive what the music concern was like in the '00s and their face may take on an expression more than usually associated with narrowly averted disasters like machine accidents or, more accurately, attempted robberies. Due to peer-to-peer file-sharing platforms like Napster and Limewire, U.S. recorded-music revenues lost more than half their value in the early years of the 21st century, falling precipitously from an all-fourth dimension loftier of $xiv.6 billion in 1999 to $half-dozen.7 billion in 2014 and 2015 (according to the RIAA) as songs transitioned from being sold on a physical object like a CD or vinyl to becoming a sound file that could be easily — and illegally — distributed for gratis. Piracy ran rampant as the music industry failed to come to grips with how chop-chop and drastically its world had changed. While iTunes brought some stability to a concern model in freefall, in essence an unabridged generation grew upwardly believing that it didn't take to pay for music.

Only streaming, led by Spotify, the abstraction of Swedish entrepreneurs Daniel Ek and Martin Lorentzon, changed all that. Founded in Stockholm on April 23, 2006, and seeking a solution to the industry'southward piracy problem, the on-demand audio-streaming service was built on the understanding that consumers who aren't inclined to buy a specific album or song might be willing to pay for ease of access to a big library of music. For a $9.99 monthly fee (or gratuitous to those who don't mind sitting through dozens of groove-busting advertisements), the site is an open archive, easily searchable and replete with more music than anyone could play in a lifetime. The visitor'south U.Southward. launch in July 2011 opened the floodgates, and Apple tree Music's streaming service debuted four years afterward.

How completely has streaming transformed the music earth? The platform rose from 7% of the U.South. market in 2010 to a whopping 83% past the end of 2020 — and recorded-music revenues saw their fifth consecutive year of growth, topping $12.two billion, per the RIAA. Information technology's no understatement to say that streaming saved the record- ed-music business organization, and that global market leader Spotify led the accuse toward the stability and growth that the manufacture is savour- ing today. In laurels of the game-changing digital service provider's 15th ceremony, Diversity breaks downward xv innovations, transformations, modifications and other ways Spotify has changed how people consume music and brought new functionalities to its platform.

Jem Aswad contributed to this written report.

1. The Refuse of Music Piracy

The illegal downloading and file-sharing introduced by Napster, Limewire and others led to such rampant piracy that it seemed the genie could never exist put back in the canteen. Yet Spotify fabricated legal streaming so easy that, combined with the music industry's (at times heavy- handed) consumer awareness campaigns, new generations were taught to pay for music again, albeit at a fraction of the sometime cost of a CD. Merely by that point, less was better than aught. In a U.K. study past market researcher YouGov, music piracy fell from eighteen% in 2013 to 10% in 2018 — and 22% of those surveyed who illegally downloaded music said they expected to stop within five years. Indeed, a 2019 study of all online piracy by the American Academy International Law Review states: "Our main conclusion is that online piracy is declining. The key driver for this decline is the increasing availability of affordable legal content, rather than enforcement measures."

2. De-Genrefication of Music

Back in the CD era, existence musically adventurous was an expensive luxury: How many people paid nearly $20 for an album they ended up not liking? But subscription services enable users to explore limitless artists, genres and sounds for $10 per month. Because of this accessibility, Spotify has become a boon to experimentation for music lovers and music makers alike. Not only has streaming led to genre-fusing styles like SoundCloud rap, but a 2019 survey past enquiry firm YPulse found that 85% of millennial Spotify users said their music tastes do not autumn into ane category.

3. Free Subscription Tier

For many years, Spotify was criticized for its free (aka "advertizement-supported") tier, which enables users to stream as much music as they want if they're willing to sit through advertisements. Notwithstanding Ek and reps for Spotify insisted that the free tier was an effective on-ramp for paying customers. And the company'south steady rise in paid subscribers, which passed the 155 million mark in the fourth quarter of last year (growing by 31 million over fourth-quarter 2019), suggests that their assertion was correct. The gratuitous tier likewise provides market research of its own: For example, in 2015, Brian Benedik, Spotify's and so-VP of North American advertising, explained that users had created hundreds of thousands of barbecue-themed playlists on the DSP, assuasive the company to make more educated guesses about what products a user might desire when listening to that kind of playlist — perchance an advertisement for lawn care or one for a summery, feel-proficient album. While the gratuitous tier is essentially a loss leader (it accounted for only 9% of Spotify's revenue in 2020 and less than i% of its gross profit), there'southward little question that the tier has been good for the company'due south overall business, and for bringing converts to streaming.

4. Mood Playlists

Non only accept streaming services broken downwardly many traditional boundaries between musical genres — they've recategorized many of them into "moods" via playlists that were first pioneered by Spotify. Since the early 2010s, the dedicated editorial team at the company has been making emotive and genre-less playlists, like Mood Booster, which includes happy, optimistic songs across all genres, or, more recently, Lorem, which Spotify has described as "the loose knit sweater, DIY bedroom mural wall, alt milk of playlists" (whatever that means).

5. Autoplay

Prior to the streaming era, the concept of autoplay every bit nosotros know it today did not exist. Given the limited user libraries of digital download marketplaces like iTunes, at that place were few real ways, without the user completing a purchase to beef upwards their personal library, to offering new suggestions of songs. But with the rise of streaming, DSPs like Spotify could offer users more than content after their electric current playlist or album was over, including algorithmic suggestions of new songs that fit with the playlist's motif. Spotify became the first on-demand, sound-just streaming service to popularize autoplay, a feature that is included in all streaming services now.

6. Catastrophe Apple'south Monopoly

With the introduction of the iPod in 2001 and iTunes two years later, Apple chop-chop and completely dominated the legal digital music earth, holding a whopping 69% of the digital sales market in 2009. Its closest competitor, Amazon MP3, lagged far behind with only eight% of the marketplace share during that year. Just Apple's delinquent reign over digital music consumption ended in 2016 when streaming revenue finally surpassed that of digital downloads. Spotify led amongst streamers in the second quarter that year with 44% of the global marketplace; Apple tree Music followed, with 19%. Spotify continues to agree the top spot as an audio-but DSP, maintaining 34% of the global streaming marketplace every bit of the second quarter of 2020.

vii. Playlist Curators Become Stars

Spotify's team of playlist curators (known as editors) tin can play a big office in a vocal's success: A prime spot on popular playlists similar Today's Top Hits, Rap Caviar or New Music Friday is highly coveted. One of the kickoff such curators was Tuma Basa, founder of Rap Caviar, Spotify'due south hottest hip- hop playlist, who became a minor star in his own correct and left the company in 2018 for a top gig at YouTube Music. Yet Carl Chery, who replaced Basa, and Ned Monahan, who oversees Today's Peak Hits and New Music Friday, forth with Antonio Vasquez for Viva Latino and Lizzy Szabo for the alt-leaning Lorem, accept establish themselves in a taste-making office non worlds away from the one formerly held by radio DJs. Once the most popular way of consuming music, in-automobile daily radio listening has fallen from 43% in 2016 to 29% in 2019 among millennials and Gen Z listeners, while streaming music daily on a smartphone has increased from 33% in 2016 to 41% in 2019 among that same demographic.

eight. Your Personalized Year in Recap

Spotify became the showtime DSP to offer listeners a personalized year-finish review of listening habits with 2015's "Year in Music." This was swiftly rebranded every bit "Spotify Wrapped" in 2016, and although the offerings accept grown in number each twelvemonth, the concept has remained the same: Many music fans find their social media feeds filled with friends' "Wrapped" lists when they're released every December. Apple Music eventually followed arrange with its "Replay" feature, which debuted in 2019. Tidal joined in last year with a similar product, "My 2020 Rewind." Featuring easy-to-share social media graphics, Spotify Wrapped provides the company with gratis advertising for its streaming service each Dec, and it pioneered the concept of sharing select data and analytics with users, providing them with insight into their own habits.

nine. Songwriter and Producer Credits and Promotion

Music fans have long bemoaned the loss of liner notes, which fell past the wayside as music moved from CDs to digital platforms. That loss has been disastrous for songwriters, producers, engineers and others in the musical ecosystem whose work was previously acknowledged on album covers and CD booklets merely now requires a Google search. iTunes debuted its Composer'southward View feature in 2013, and Spotify likewise lagged behind the public's need for a proper crediting system — but it was still the first audio-just streaming service to implement public credits in Feb 2018. Since the launch of credits, Spotify has also debuted its Written Past playlists to showcase the work of major songwriters and its recent Songwriters Hub. Withal, fifty-fifty though Spotify was offset, Tidal, which established its first enhanced credits feature in 2019, remains the industry leader, with expansive credits that oftentimes include musicians and engineers too equally songwriters and producers.

x. The Problematic 'Hateful Conduct' Policy

In what may be its highest-profile public relations misfire, Spotify attempted to sanction R. Kelly as uproar around long-standing sexual-misconduct allegations against the vocaliser peaked in early on 2018. The company has long had guidelines opposing "detest content," which information technology has defined as content that "incites hatred or violence against a grouping or individual based on characteristics, including, race, organized religion, gender identity, sex, ethnicity, nationality, sexual orientation, veteran status, or disability." But when it tried to aggrandize that definition to artists who engage in "hateful carry" (i.e., Kelly), things got complicated. Spotify finer banned his music from its playlists and promotion — although his albums and singles remained available on the platform — even though the singer had not been convicted of whatsoever crime. Yet music by artists with multiple felony convictions, and even convicted murderer Phil Spector, remained on its playlists. The visitor chop-chop admitted its mis-step and said information technology would walk back the policy, although it is manifestly still in effect: In the wake of country star Morgan Wallen's contempo utilise of a racist term (captured on video by one of his neighbors), his music disappeared from many Spotify playlists but has quietly returned to some others.

11. Artists Tin can Share Their Stories

Spotify was the showtime streaming service to characteristic Stories straight on its platform — now known as Spotify Clips: Accessed past a tappable circular icon at the top left corner of playlists like Written by Mike Dean, musicians tin record curt videos to share and connect with fans just like on social sites like Snapchat, Instagram or Twitter. For example, veteran producer-songwriter Dean shares with interested fans the backstory of creating Travis Scott's "Sicko Style." The characteristic, which debuted in January, is available for select creators.

12. Direct Donations

Later COVID-xix devastated the alive music industry, Spotify stepped in with a new characteristic called Artist Fundraising Pick, allowing fans to "tip" or donate directly on the creative person's page. The money clustered through this new feature could either exist sent to a charity of the artist'south choosing or get straight into the artist's pocket, providing much-needed relief during the shutdown. Though the tipping mirrors options on Chinese streaming services like Tencent'southward QQ Music, Kugou and Kuwo, Spotify'south version was the offset of its kind in the worldwide audio-merely streaming market. The feature has drawn backfire from some musicians and critics, 1 of whom called the tip jar a "tacit access that artists are not being paid plenty" by Spotify itself.

13. Mini-Videos to Accompany Songs

Spotify Canvas, one of the newest contributions on this listing, was premiered for some artists several years ago, but the tool just launched out of Beta in February 2021. Sail allows artists to upload a customized five to eight-2nd video loop to accompany music'due south cover art as the song plays. This interactive art lets artists offer a more nuanced portrait of their artistic vision within the context of an audio-but streaming experience. Spotify has already seen impressive results with this feature: The company's data suggests that users listening to a vocal with Sail are 5% more likely to proceed streaming, 20% more probable to add the vocal to their playlist and 9% more than likely to visit the artist's profile page.

14. Licensed Music for Podcasts

Spotify has been flirting with the concept of interwoven spoken word and music since 2019 with its playlist Your Daily Drive, a personalized selection that includes news report podcasts and songs from the user's listening history. Simply Spotify'south self-owned podcast creation platform Anchor has recently unveiled a feature that allows podcasters to integrate total songs from Spotify'southward library directly into their shows, with no further licensing required. Appear in October, Ballast'due south latest feature is a major development for podcast creators who have long struggled with the format's cumbersome, expensive licensing process, and allows for greater innovation in the infinite. Spotify refers to such content equally the "hereafter formats" of audio, enabling the creation of podcasts like guided meditations, album reviews and DJ- and radio-style shows.

fifteen. Controversial Targeted Ads for Artists

In October 2019, Spotify launched ad platform Marquee, the get-go of its kind for an sound-only streaming service. Accessible through the Spotify for Artists portal, Marquee is a sponsored recommendation tool for which a performer or their team pays Spotify for advertisements targeting users nearly probable to be interested in the advert. Boasting an impressive click-through charge per unit of 20%, Marquee ads are ane of Spotify's most lucrative new revenue streams, with a rate of 55 cents per click-through. This new feature, yet, has been controversial, prompting some to telephone call Marquee a grade of payola for the streaming historic period.