Statista Digital Market Outlook has forecast digital music revenue in Canada between 2015 and 2021. It shows that revenue from digital revenue from music downloads will decrease from $154 million (USD) in 2015 to about $94 million (USD) to 2021.
Meanwhile, revenue for music streaming will increase significantly over the same 7-year period from about $62 million (USD) in 2015 to about $122 million (USD) in 2021. Keep in mind that those number are just Statista's estimate and the outcome could be completely different.
For as long music as existed, it has taken many forms - wax cylinders, vinyl records, cassette tapes and CDs. In the past few years, streaming services such as Spotify or Apple Music are becoming the place for people to listen to music.
According to a Nielsen Canada survey done in June of this year millennial consumers used approximately 7% of their spending money on paid online streaming services in the first half of 2016. As compared to 3% in 2015 in the same period. That might not be a significant jump just in one year’s time but it is enough to show that it is rising.
Digital Music Revenue in Canada
Spotify
Spotify offers a free and paid version of their service. The free version allows you to listen to any music on Spotify with ads and a limited amount of skips to the next song.
If you were to upgrade to Spotify Premium for $9.99 per month, you get unlimited and unrestricted access to Spotify’s catalogue as well as the ability to save music for offline listening on your phone.
CDs
CDs can range from $10 to $25 per album. And if you were to buy one CD per month, it could you double the price of a 1-year Spotify Premium subscription.
Apple Music
Unlike Spotify, Apple Music doesn't have a free version of their service beyond the initial 3 month free trial that they offer.
Apple Music costs $9.99 per month and offers similar features to Spotify Premium, such as offline listening and no ads.
Streaming Services vs CDs
Being on music streaming services is also beneficial to artists and bands. Sean Watson Graham, lead singer of Toronto-based band Modern Space, says it has really helped the band a lot. Modern Space was chosen to be part of the Spotify Spotlight Program which helps up and coming artists grow their reach.
"I think streaming services are super beneficial to any starting up bands that might not have the opportunity to distribute their music to people all around the world."
- Sean Watson Graham, lead singer of Modern Space
Graham says, “It works both ways and I can see a lot of good in it, it allows you have your music throughout the world, if you’re in the UK, Australia, all you need to do to listen to a band from Toronto is to have this little app and type in their name, so I think streaming services are super beneficial to any starting up bands that might not have the opportunity to distribute their music to people all around the world.”
One of the things that the program does is that it puts the band’s music automatically on playlists on the service using Spotify’s algorithms. Graham says, “I think that streaming services are great for artists because it gives you the opportunity to discover bands that you might not have found by listening to the radio cause it essentially in the past, you would have to a hit on the radio to be heard, kind of like now with streaming services, you get to decide which music you want to listen to as opposed to other people.”
Modern Space
Streaming Activity in Canada
If we take a look at the total number of music streaming activity in Canada as done by Nielsen. We can see that the total number of audio streams has significantly increased since the 2nd half of 2014 from 0.93 billion to about 9.2 billion.
Over the next 5-10 years, we’ll see a bigger shift from traditional listening and buying habits of buying music digitally to more people listening to their favourite music on streaming services.