The second quarter of 2020 brought with it the first drop in revenue generated from music streaming in history.
A report by Counterpoint Research cited by Hypebot showed that music streaming revenue has dropped by 2%, the first time the industry has been on a downward slope. Though overall revenue has seen a steady 13% increase in quarter two year over year (to the tune of $6.7 billion), 2020’s second quarter proved to be less fruitful than the first.
A number of factors contributed to the decline, including discount offers and lower subscription prices meant to encourage users to remain on paid streaming plans. At a time when many individuals are looking to cut expenses amid financial uncertainty surrounding the COVID-19 pandemic, streaming platforms have sought out ways to retain customers. Many have added payment-free months and reducing subscription rates.
Advertisement spending has also been reduced by many companies, which had an additional effect on quarter two’s revenue drop.
“Advertisement revenues saw a dip since many companies opted to cut expenditure in view of the COVID-19 pandemic,” said Research Analyst Abhilash Kumar. “However, podcasts related to different genres were able to keep people glued, offsetting some of the decline.”
After a slight rise in late June, Counterpoint predicts that streaming revenue growth will return to pre-COVID levels by the end of the year.
Image Credit: Reynier Carl
