Streaming is more popular than it ever has been, with millions of us paying for subscriptions. So what exactly is music streaming, and how has it affected the industry?

For millions of people all over the world, listening to music means streaming music. Our article on the history of music distribution can fill you in on how we got here. But the important thing is streaming is here to stay, at least for the foreseeable future. It’s very likely that you use it yourself, so how exactly does it work?

How music streaming works

Most streaming platforms offer up an astonishing library of songs, albums and playlists. All of these songs can theoretically be played by every user at one time over the internet, no matter where they are, and no matter what device they are using. From a technical standpoint, streaming works by sending (or, well, streaming) information from a server to an individual player. The actual song exists on the server as a raw file. Raw files are huge and detailed, so they have to be compressed in order to travel over the internet instantaneously. When the stream reaches your device, it will decode the compressed information using an app or plugin.

Because the raw files are compressed for transmission, some argue that music streaming is lower quality than other formats like CDs, vinyl records, or even digital downloads. This is broadly true. Spotify’s default streaming quality is 160 kbps. A regular MP3 file is normally 320 kbps (the same as Spotify’s optional “high quality streaming” setting). CDs are usually 1,411 kbps.

The success of music streaming has proven that listeners do not necessarily prize quality over quantity and convenience. The sheer number of songs available, and the ease of finding and listening to them is the real appeal. And it’s become so popular, that the whole industry has had to reorganise around it: in 2019, streaming numbers topped a trillion for the first time in history, and in March, it was estimated that 80% of revenue from recorded music was generated by streaming.

How streaming has impacted artists

One of the major ways streaming has affected artists’ lives is through royalty payments. Though streaming is a step up from illegal downloads, which obviously earn artists no money at all, these services give notoriously little to the artists, producers, songwriters and record labels who provide them with music. Our article on artists and streaming services covers the topic further, but needless to say it has changed the way musicians make music. For many, lower royalties from recordings has meant a shift towards live performing as the primary means of making money.

Despite this, a Wall Street Journal report has found that artists are releasing more music than they ever have. Experts put this down to the ease of recording, releasing and marketing music in the digital era, a lot of which is driven by streaming.

How streaming has changed the charts

It’s clear that streaming a song once is not the same as buying a CD single, or even downloading a track digitally. So instead, the UK Official Chart company equates 150 streams to one sale. The specific number is quite arbitrary, but it does make some sort of intuitive sense. The biggest issue this throws up, though, is the problem of extremely popular artists populating the charts with non-singles. This could theoretically have been a problem in the digital downloads era. In practice, it only became an issue a few years back, when Ed Sheeran’s album ÷ propelled all 16 of its tracks into the singles chart. A new rule was introduced to stop this happening, but this incident demonstrates the fragility of the system. Music streaming has changed the industry in many ways, and some segments are still figuring out the best way to adapt.

For more information about how our label services and digital distribution team can help manage and grow your label, get in touch.

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