How streaming saved the music industry in Nashville

In 2017, streaming accounted for 38% of the $17.3 billion in revenue generated by the music industry, totaling $6.6 billion. Digital revenues, including streaming, were up 19% over 2016 numbers and paid subscription streaming increased 45% itself.

Despite three years of consecutive strong gains for the industry, revenues are still not back to the level of 1999 when physical albums accounted for all of the $25.2 billion in revenue generated. However, the advent of streaming has been a boom to an industry that saw a steady decline over the last decade.

Just as CDs replaced cassettes, streaming has become king. How did we get here and how has this drastic change affected the music industry in Nashville specifically?

Streaming started to gain real traction in the early 2010s with services like Pandora and Last.fm offering free online radio that you could personalize to match your preferences. Consumers love having control over what they consume and when, so music providers giving this level of control was a natural step in that direction.

Now, the biggest players in the industry are Apple Music and Spotify, with 49.5 million monthly users and 47.7 million monthly users respectively. As more people adopt streaming as their main means of music consumption, expect to see the number and variety of streaming services to increase.

The story of streaming can’t be told without also discussing the passage of the Music Modernization Act in September of 2018. Before this legislation passed with bipartisan support, streaming services had difficulty verifying that they had correctly licensed music on their services. The Music Modernization Act will make it easy for digital streaming services to license music with confidence that they won’t face a lawsuit from the copyright holder. This could mean that even more artists and songs become available for digital streaming, and that these content creators will receive the compensation they deserve.

As the structure around streaming becomes more standardized, it should continue to supplant other revenue streams for both artists and record labels.

But what about Nashville? As Music City, the music industry has a huge impact on our regional economy. How has streaming affected the music industry in our area?

The increase in revenues across the industry, due to the rise of streaming, has certainly helped businesses in Nashville rebound from the decline experienced in the early part of the twenty-first century. Furthermore, streaming services including Spotify and Apple Music have increased their local staff, and Amazon Music and Pandora have opened outlets in Music City too. Record labels in town have hired entire new teams to manage the strategy of music promotion on digital streaming platforms. Music banking has also been empowered to make more informed decisions based on streaming data and can take more risks on independent artists.

Streaming has already had a huge impact on not only how the music industry makes money, but also how it functions as a whole. At the Chamber, we want to empower businesses in the music industry to grow and continue to make our region a destination for economic growth. If you’d like to see how we can help your business grow, click here to learn more about membership opportunities. If you are looking for resources specifically for musicians and the music industry, check out our list of music business members here.