Policy Research

2017 was a stellar year for the recorded music business. Global recorded music revenues reached $17.4 billion in 2017 in trade values, up from $16 billion in 2016, an annual growth rate of 8.5%. That $1.4 billion of growth puts the global total just below 2008 levels ($17.7 billion) meaning that the decline wrought through much of the last 10 years has been expunged. The recorded music business is locked firmly in growth mode, following nearly $1 billion growth in 2016.

The music industry is streaming forward. In 2017, we saw an astounding 63 percent increase in subscription streaming revenue.1 Both subscription and advertising-supported music services saw significant increases in revenue earned and royalties generated. Thanks to streaming, the industry is poised for sustained growth in the future. DiMA members

Beyoncé made history with her album Lemonade, which was streamed a record 115 million times in its first week. Just one week later, Drake broke that record when his album Views was streamed 245 million times. The age of streaming music has arrived in full force, displacing both physical sales (e.g., CDs) and downloaded songs (e.g., iTunes).

In this paper, we study how the adoption of music streaming affects listening behavior. Using a unique panel data set of individual consumers’ listening histories across many digital music platforms, adoption of streaming leads to very large increases in quantity and diversity of consumption in the first months after adoption.