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“Without music, life would be a mistake.” – Friedrich Nietzsche

Though music has been around for tens of thousands of years in one form or another, what’s changed over that span of time is how we experience it. From vinyl to cassette tapes to CDs, and now, to the digital era, the form in which music has invaded our ears has changed consistently with evolving technology. Nowadays, one doesn’t even have to own something tangible to listen to music – it can all be streamed from a file online.

A new study by Parks Associates shows that two-thirds of Americans regularly stream music or other audio from the Internet. 40 percent use the free tier of audio streaming services, while just over a quarter use a paid music service. Amazon Prime Music takes the cake of being the most used subscription music service with 10 percent of households using it, while 6 percent use Pandora One and 4 percent subscribe to Spotify Premium. However, increased competition from newer platforms like Apple Music and Tidal could quickly change these numbers.

Due to the relative ease of streaming most music online for free, the study has stated that getting consumers to pay for music is a harder endeavor than music streaming companies realize. “Consumers have shown plenty of interest in streaming audio and music services, but most consumers have opted for free accounts. Music service providers have built a model around converting free users into paying customers, but this strategy has not paid off so far,” said Glenn Hower, Research Analyst at Parks Associates.

Hower further iterated that streaming music providers have to get creative and partner up with other companies to lure consumers into using the paid tier of their respective services. “Streaming music providers will have to get creative with revenue streams if they hope to build sustainable businesses, whether through partnerships with broadband and mobile carriers or through premium service offerings streaming high-quality lossless audio.”

Technology has also played a part in increasing the number of ways music can be listened to. Although most people stream music from mobile devices or their desktop, audio devices are also being connected to the Internet. “Advances in wireless streaming technology and a resurgence of interest in hi-resolution audio will stimulate consumer demand for Internet-connected audio devices,” said Brad Russell, Research Analyst at Parks Associates.

Russell also cited the multi-billion dollar home audio segment, which music streaming companies can utilize to raise revenue. Google’s Chromecast Audio streaming device can bring music streams practically anywhere, such as wireless speakers, TVs and car stereos. “Wireless speakers, multiroom audio systems, and soundbars constitute a growing home audio segment, which is offsetting declining sales in home theater and traditional audio components. Together, these three devices will generate $26 billion annually in global sales in 2020,” he said.

Russell also cited that the streaming audio segment is emerging, but technological advances have yet to be made. “The streaming audio segment is currently in an in-between stage where device makers have not quite caught up with incorporating new audio streaming technologies into their devices, beyond Bluetooth.” With streaming the predominantly  avenue for listening to music, what remains to be seen is whether its popularity can be translated into revenue for an industry that desperately needs it.

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