Music Industry Trends for 2024

Music Streaming Stats

According to Exploding stats, approximately 4 in 5 people listen to one of the many music streaming services on the market. In real numbers, there is an increase from 68 million to over 616.2 million between 2015 and 2022.

Market leaders in the music streaming industry include (but are not limited to) Spotify, Apple Music, Amazon Music, YouTube Music, TIDAL, Deezer, Gaana, Soundcloud, Qobuz, and Tencent Music Entertainment Group.

The reported figure for music streaming in 2023 in the US alone reached a vast 4 trillion. The most used method for music streaming is on-demand options. You can see weekly music trends globally, per DSP here: SongsBrew.

Spotify holds 30% of the music streaming market share according to MIDiA.

A breakdown:

TikTok Music, Non-DSP Streaming

One of the biggest and most noticeable changes in the last two years is the power of the 10-second clip. TikTok has mastered the art of delivering music in the most bite-sized way, and musicians have seen extreme success from this.

Ten seconds is enough to get a song stuck in your head, learn a snippet or lyrics, and head to Google to find the song.

While that has been an incredible function for artists, it compounds another issue: attention span. Spotify has taken steps to capitalize on the short attention span for music consumption.

To cater to those shorter audience attention spans, Spotify has started rolling out a change that not everyone was happy with. Parts of the songs, podcasts, and albums are isolated—in a bit to speed up the listening process.

The future of TikTok is uncertain in the US, so it's smart to implement something that could fill the bite-sized music gap.

The Death of the Album & The Birth of the AI Playlist

Digitally speaking, only here. There has been a rapid rise in the number of people investing time and money into analog listening. Tape, CD, and record players have been making a big comeback. So, for those who listen to albums, this trend will continue.

But what about albums in a digital world?

DSPs have pushed for personalized listening and curated playlists, using algorithms, sometimes to their peril, to refine what they offer listeners. Although this makes for simplistic listening sessions, it dramatically narrows what people listen to.

What does that look like in reality? Well, it seems like most users are shifting from content to context-based listening habits.

What that means is, as we have seen, a rise in playlists directed at moods and activities. Spotify has a powerful AI tool and has been refining it over the last year.

And while there are reports of the personalized playlists not being quite right - for millions, the mood-boosting work playlists are precisely what they need.

Spotify isn’t the only DSP that does this; it can be seen and experienced with YouTube Music, Apple Music, and more.

Entire playlists can be built with AI based on a short query. The real trick will be the first DSP to produce an AI playlist that caters to the listener's taste without a single song they have heard. Apple Music is close, with their Daily Discovery.

Realistically, with over 100 million songs on every platform, there is music you haven’t heard yet - AI playlists could be the way to find it.

FreeYourMusic notes that more users are moving their playlists from one platform to another to try out these playlist features.

Podcast market growth

Almost all DSPs now include some level of podcast within their app, or in the case of Apple Music - a stand-alone podcast app.

Deloitte Insights stated that they expect the number of people listening to Podcasts to increase to 1.7 billion people per month.

Of course, that is averaged out. That means that music streaming platforms will likely see increased revenue from podcasts.

The podcast market is ripe for more innovation and investment in advertisements, which we have already seen Spotify work towards. Spotify secured a world-first partnership with WaveMaker to uniquely deliver advertisement content, which we covered in the Spotify Business Model article.

Innovation is likely to cement the role of video content in podcasts, which has been experimented with already - as reported by The Verge.

Handpicked Curated Playlists

In the opposite direction, music curation is huge right now. Humans dedicate time to building playlists that rarely feature the biggest industry names.

What’s interesting about this trend is that it comes from a place of a passion for music. Over time, it has become a means of visibility and promotion for new artists and a source of income for those who build the playlists.

Whether you know it or not, most playlists you make are already public. People can check out what you are listening to and copy the playlists themselves. From there, it can be modified, and they can build something that fits their tastes.

But it all starts with that initial build - which likely features a couple of placements from new artists (who have paid to be included).

Increased audio quality and service consolidation

Services like Spotify and Apple Music are making two distinct decisions. Spotify chooses a consolidated service option, while Apple Music separates its services.

Spotify's mobile app and web play offer audiobooks, music, and podcasts. Apple has taken a different approach and has separate apps for everything.

Consolidation of the services can also be seen on iHeartRadio. It gives a single point for all types of Audi entertainment. Fans of audiobooks and podcasts are likelier to choose a paid subscription to services offering this bundle.

Audiophiles are a more dedicated type of listener and will often opt for subscription services that are music and audio quality-focused. Typically selecting TIDAL, Qobuz, Deezer, or Apple Music.

Some articles suggest that late adopters select their music streaming platform based on things like lossless audio, Dolby Atmos, Spatial Audio, FLAC, and more. So that users who prefer CD quality or other analog listening can get the quality they are used to.

Regardless of those audio-quality improvements, it doesn't travel over Bluetooth.

High-resolution audio will become the standard rather than a bonus, and higher-resolution audio format options will be more common. Currently, hi-res gives a competitive edge, but not for long.

Gen Z driving growth

While late adopters of music streaming are bolstering the number of subscribers to high-quality services, Gen Z is driving global growth for music streaming. Content creation in the audio entertainment market has seen substantial growth.

Younger audiences now have access to streaming audio services. Early adoption of social media access to music on platforms like TikTok and Instagram and the rise of music curation drive younger audiences to playlists hosted on streaming services.

Independent creators who create music-based content are easily accessible.

Music is integrated into everyday life more often with millennials and Gen Z.

With music streaming services like TIDAL reducing costs and Spotify having a Free tier, musical entertainment is budget-friendly. Podcasts, audiobooks, and music are positioned well even in times of economic downturn.

It's not just Gen Z listeners responsible for the industry's growth. Gen Z music creators use a combination of tools to create politically and socially aware music that resonates with modern times—using the power of TikTok ten-second clips to amass millions of streams.

Playlist Placement Services

It's not new, but it's certainly growing. Companies like CDBaby and Ditto have been around for years. Acting as an aggregation point for artists who want to have their music on major streaming platforms. But that has always only been half the battle.

Once musicians get their music on the DSPs, they need to go hard on music promotion and hope that they make an editor's selection playlist.

However, with the changing landscape, a new service has plugged the gap between the artist's music on a streaming platform and getting listens.

Legitimate companies offer to pitch artists to playlist curators, hoping they will play the tracks on their playlists.

But here is where it gets interesting—it’s not just Spotify or Apple Music playlist curators who are pitched. TikTok music playlist curators and tastemaker music blogs are also pitched.

TikTok holds that ten-second power we touched on earlier, and music blogs still hold court in the industry; they are vital to the success of artists.

Playlist placement services are a powerful tool, and for the foreseeable future, while playlist curation is in play, this specific industry will grow.

Metaverse and VR concerts

We have seen a couple of concerts in Fortnite, including Ariana Grande, Travis Scott, Eminem, and, more recently, Lady Gaga. Using Travis Scott as an example, he earned a cool $20 million for an online appearance, and Fortnite has 12.3 concurrent players.

It’s big business and sees an industry crossover that has always made sense - Music X Gaming.

VR and AR are being rolled out across social media, and music is the ideal form of entertainment to maximize these rollouts and increase user uptake. 2024 will likely see more innovation in online games and social media platforms to offer more ‘live’ performances from the world's biggest stars.

DDEX

With the huge growth seen in user-generated content and its becoming a preferred method of advertisement and monetization, DDEX is coming into play. Digital Data Exchange Protocol is a way to standardize how MetaData is used.

Companies that have implemented a rich metadata protocol saw a 10% increase in the usage of the associated sound recordings. When a standard method of collecting and storing music metadata is in place, it will prevent the fragments of data currently in use.

More DSPs will likely begin adopting a standardized music tagging system, improving users' experiences and plugging the gaps between data pipelines and music streaming.

Clips, samples, shorts

Spotify and YouTube Music have already implemented a TikTok-like experience. Users can access short videos to browse music, adding a new layer to the in-app experience. This feature relies on a video editor that allows creators to quickly produce engaging, short-form content.

This feature can keep users engaged since attention spans are getting shorter thanks to short-form, ultra-consumable content. Users can browse thousands of tracks using a swipe motion they already know.

AI Music

In 2023, AI music-making and playlist creation really made an impact. Artificial intelligence generates lyrics, beats, vocals, and more for music. The combination leads to more hybrid music for us to enjoy. The use of AI has come under fire in the industry, as it may dilute the creative aspect.

However, since artificial intelligence is becoming more commonplace across all sectors, it could be a power for good, too.

There are some exciting ideas, like an infinite album. It was created with an artist and AI, so the music could potentially run forever.

Or dynamic albums where artists offer the ultimate in fan engagement. An album is created for manipulation (within parameters) so that it is individual to each listener based on the changes they make.

Better artist pay and transparency

Artists in the music industry have often spoken out about the streaming industry's lack of payment and transparency. 2023 saw a rise in the pushback from labels, artists, and lawmakers for more transparency and better pay: EU lawmakers aim to push Spotify on better pay for music artists.

Universal Music Group has been at the forefront of making big changes, first with removing the UMG library from TikTok in a dispute over fair pay. Then, they moved to make agreements with DSPs called the 'artist-centric' payment royalty model.

The artist-centric royalty model means that artists could be more fairly compensated for the number of streams they get.

Deezer announced some models and planned to roll them out first for French artists, followed by a global rollout throughout 2024.

Here are the 'pillars' of the UMG & Deezer 'artist-centric' model:

• Any artist that gets over 1000 monthly listeners from 500 unique users will get a double boost.
• Double-boost gets doubled once more for artists whose listeners have searched. The active search is then preferable to the algorithm serving the content. This means higher pay for artists who have an active and engaged audience.
• A clean-up of what is considered to be noise, as well as a demonetization.
• It's worth reading the quote in its entirety for the final pillar:

User-centric capped approach – In addition to the mentioned boosts, there is a user-centric element to the new model, with a monetization cap of 1000 streams per individual user per month. This means that every single user’s contribution to the royalty pool is counted as 1000 streams, regardless of the actual amount. This way, available royalties are shared more fairly between the artists the user listens to each month and fraudulent behavior is discouraged.

Music Streaming Preference

The way people listen to music has been changing over the last several years. While the popularity of music streaming won't backslide for a while, it is being modified as these services develop.

Spotify Premium users are often convinced to upgrade from the free tier to access ad-free listening. However, with adverts being such a large part of their revenue, they must find new ways to compensate for that loss.

The three most cited reasons for using a paid music streaming service are:

• Access to the full 100 million tracks libraries
• On-demand listening (selecting the song rather than pre-made playlists)
• Ad-free listening

IFPI also reported that the average listener spends more than 20 hours a week listening to music, which is an increase from 2021.

This increased listening time may directly correlate with music being integral to people's mental and physical well-being. 69% of listeners consider music important for their mental health, with the highest percentages in Women, millennials, and paid streaming service users.

Music Trends by Genre

Drake was the most streamed artist in the 2010s and remains among the highest-paid artists on streaming platforms. SongsBrew.com allows you to track weekly music listening trends.

Physical integration on digital platforms

Spotify and Qobuz currently offer some of the strongest physical integrations, including merchandise sales, vinyl, CDs, and even live music tickets.

As an extension of the service offering, fans can buy new items and stream simultaneously, with localization playing a key role in increasing ticket sales.

Using geo-data, Spotify gives the user base information about live music in their area. Combined with listening data, the recommendations are personalized for the listener.

The ability to include physical items means that streaming services and artists can increase their revenue and make the music experience more "stoppable." The time between users hearing a song for the first time and being able to buy tickets, clothing, apparel, or CDs and records is streamlined.

This integration could stretch into podcasts and audiobooks.

Context Over Content

Music discovery and suggestion algorithms are getting more refined, and part of that refinement is getting more accurate insight into how people incorporate music into their daily lives. For example, when people are likely to switch genres, and more importantly, the activity it goes with.

Combining all the data, DSPs are now moving towards contextual recommendations—things like Morning Commutes, Study Sessions, and Workouts.

Those are just the start; more recently, there has been an increase in playlists created based on mood. Multiple data sets come into play here.

• Demographic & geolocation profile
• Temporal patterns
• Popularity and diversity preferences
• Genre, mood, style, and era preferences
• Saved songs and albums & followed artists
• Most-played and preferred songs and artist

User listening data and audio analysis of a song's energy, danceability, lyrics, and valance build strong contextual playlists and personalization features:

• Personalized search results
• Personalized browse section
• Playlist suggestions & enhanced playlist feature
• Artist/song radio and autoplay features
• Personalized editorial playlists
• Special personalized playlists (Your Time Capsule, On Repeat, Repeat Rewind, etc.)
• Artist / Decade / Mood / Genre Mix playlists
• Your Daily Mix playlists
• Discover Weekly & Release Radar playlists

They will often be called something in keeping with trending language, like 'slow weekend sad tunes' or 'Sunday morning coffee music.'

Key takeaways for the music streaming industry trends in 2024

Key Takeaways:

• Rapid Growth in Music Streaming: The music streaming landscape has experienced significant growth over the past decade and is predicted to grow yearly into 2027.
• Market Leaders: Include Spotify, Apple Music, Amazon Music, YouTube Music. Spotify holds a 30% share.
• TikTok's Influence: TikTok's short video format has revolutionized music discovery, with its 10-second clips becoming a powerful tool for artists to gain exposure and drive success. Putting power in the hands of content creators to make or break careers in the music industry.
• Attention Span Challenges: With shrinking attention spans, streaming platforms like Spotify are adapting by introducing features like isolated song parts to cater to shorter listening sessions.
• Late Adopters' Focus on Hi-Res Audio: Late adopters to on-demand streaming platforms are often particularly concerned with audio quality, opting for services that offer hi-res audio formats like FLAC, Dolby Atmos, and Spatial Audio. This preference reflects a dedication to fidelity and a desire for an audio experience that rivals or exceeds traditional analog formats.
• AI-Driven Personalization: Streaming services increasingly utilize AI algorithms to curate personalized playlists tailored to users' moods, activities, and preferences.
• Podcast Market Growth: The podcast market is expanding rapidly, with nearly all streaming platforms integrating podcasts into their services and exploring innovative monetization strategies.
• Gen Z Driving Growth: Generation Z is a significant driver of music streaming growth, leveraging platforms like TikTok and Instagram for music discovery and content creation.
• Artist Pay and Transparency: The streaming industry is experiencing a growing demand for better artist pay and transparency, and initiatives like the 'artist-centric' royalty model aim to address these concerns.
• Integration of Physical Items: Streaming platforms are integrating physical merchandise sales, concert tickets, and other items into their services, enhancing the overall music experience and revenue opportunities.

The music streaming landscape is evolving rapidly, driven by technological advancements, changing consumer preferences, and innovative business models.

Adapting to these changes will be crucial for streaming platforms and artists to thrive in this dynamic environment. Ultimately, popular music streaming services will rely more on the valuable insights they can get from data.

Listening data, metadata, trend data, and more will see another round of rapid growth in 2024.