The Future of Music Streaming: Navigating Price Increases and Global Shifts

The UK music streaming market, having experienced remarkable growth, is now showing signs of stagnation according to new research by MIDiA Research. Approximately 32.4 million people in the UK are subscribed to various streaming platforms like Spotify and Apple Music, revealing a significant market strength compared to the 20 million subscribing to video services. However, the growth rate of new subscribers has notably dropped—from 9% in 2020 to just 4%, adding only 1.25 million new customers last year.

Mark Mulligan, managing director of MIDiA, suggests that this slowdown may lead to inevitable price hikes, as companies look for ways to maintain revenue amidst stagnation. Spotify has already raised its premium subscription price from £9.99 to £11.99, alongside plans to introduce a high-fidelity streaming option, potentially increasing costs further. Similarly, Amazon Music raised prices in January, signaling a trend towards higher consumer costs.

Industry leaders like Sony Music’s Dennis Kooker emphasize that higher price tiers are necessary for the subscription model’s sustainability. Suggestions for introducing lower-priced tiers to attract new users have been dismissed as attempts to find a viable middle ground have been challenging amidst a landscape of ad-supported services already providing significant access to music.

Looking beyond the UK, MIDiA’s report highlights a robust 11.6% growth in global music service subscriptions, primarily in emerging markets like Africa and India, where cultural influences are becoming prominent in the global music scene. For instance, Sub-Saharan Africa has recently become the fastest-growing music market, with revenues exceeding $100 million, while South Korean and Latin American artists dominate worldwide charts.

Victoria Oakley from the IFPI notes the democratization of music through streaming has created a highly competitive environment. While UK artists like Myles Smith and Lola Young are emerging, it now takes significantly longer for new talents to secure widespread popularity compared to past decades, reflecting the changing dynamics in the music industry and the importance of evolving with new global trends.