Non-HiFi streaming platforms are winning the streaming war.
Between Q2 2023 and Q2 2024, only two major music streaming platforms saw their weekly active users (WAU) tick upwards: Spotify and YouTube Music.
At the same time, competitors like Apple Music and Amazon Music lost some numbers on their user base. In other words, trouble might be brewing on the music-streaming world.
Spotify and YouTube Music Grow, Other Services Stumble
The report, published by MIDiA, reveals that Spotify and YouTube Music were the only top digital service providers (DSPs) to gain weekly active users (WAU) from Q2 2023 to Q2 2024.
It’s a far cry from Q2 2020 to Q3 2022, when all DSPs saw steady WAU growth. Since then, most services have either stopped growing or started losing users, except for Spotify and YouTube Music.
Spotify’s success may tie into its move toward diversifying content.
For the past months, the company has added audiobooks into its service and even adjusted its subscription plans around it. And, just recently, the company has been reported to offer deals to video creators worth up to seven figures to boost their video content.
But, what’s more interesting is YouTube Music’s success. Despite a dip in music video views on the main YouTube platform (thanks to the TikTok effect and YouTube’s own Shorts feature), their dedicated music service is doing well.
The broader streaming market, however, is showing signs of fatigue.
For one, Universal Music Group (UMG) blamed Apple Music and Amazon Music‘s poor performance as reasons for its own slower growth in streaming revenue. They suggested that Spotify’s success might be more about regional factors, especially in areas where UMG isn’t as strong.
Bifurcation of Streaming Market: Social vs. DSP
The MIDiA report also sheds light on a growing divide in the music streaming market. On one side, we have the traditional DSPs like Spotify. On the other, there are social-driven platforms like YouTube Shorts and TikTok.
As DSP growth slows, short-form video platforms are becoming increasingly popular for music discovery and engagement.
Since Q3 2022, fewer people have been watching music videos on YouTube. This contrasts with the growth in TikTok-related activities, which were among the few to grow while other forms of engagement declined.
What’s Next for the Music Industry?
The streaming platform’s problem isn’t just about the decrease in the weekly active users, though. The report shows that most monthly consumer streaming activities and wider monthly music behaviors were also down. Meaning, the way people consume music is change a lot, and fast.
Many listeners are streaming less often, probably because of rising living costs and more competition from other forms of entertainment.
Along with the flattening of weekly active users for most DSPs, these trends suggest a maturing streaming market that might need new strategies to keep growing.
Plus, the live music sector, which boomed after the pandemic, is now also showing signs of slower growth.
Industry giants like Live Nation and Eventim recorded single-digit growth for the first time since the pandemic recovery kicked off. So, the live music market might be approaching saturation point.
As ticket prices for live events rise, future growth could be constrained, impacting this vital revenue stream for the industry.
But it’s not all doom and gloom. Despite these challenges, the MIDiA report shows that the music industry as a whole saw a 9.6% revenue increase in Q2 2024.
Only this time, the growth wasn’t just from digital streaming platforms and live music sectors; record labels and publishers also played a big part.
On another positive note, physical media is making a comeback.
CD sales have been quietly rising since 2021 after years of decline. And, in 2024, CDs outsold digital downloads by a 3-to-1 margin.
Even more impressively, vinyl records are continuing their resurgence. This unexpected return of physical formats paints a more hopeful picture, even as streaming growth begins to slow down.