Streaming Music Passes 100 Million Subscribers. Why Isn’t It a Bigger Business?

Seven big questions re: music in 2025:
1) What share of our daily media diet does audio account for?
2) What is the most popular format for listening to audio content?
3) Which generations listen to the most music?
4) How many people subscribe to a music service?
5) Which streaming service has the most listeners?
6) How large is the music industry?
7) How do streaming music services make money?

Big question #1: What share of our daily media diet does audio account for?

Quick answer: 21%.  The average American spends 2h 49m listening to audio content daily.

Big question #2: What is the most popular format for listening to audio content?

Share of digital audio listeners by format according to Activate Consulting:
1) Music - 91%
2) Podcasts - 53%
3) Audiobooks - 51%

Big question #3: Which generations listen to the most music?

Daily time spent with music by generation:
1) Gen Z - 2h 38m
2) Millennials/Gen Y - 2h 28m
3) Gen X - 1h 54m
4) Baby Boomers - 1h 12m

Big question #4: How many people subscribe to a music service?

Streaming subscribers for the music industry (YoY growth):
1) 2015 - 11M
2) 2016 - 23M (↑ 110%)
3) 2017 - 35M (↑ 56%)
4) 2018 - 47M (↑ 33%)
5) 2019 - 60M (↑ 29%)
6) 2020 - 76M (↑ 25%)
7) 2021 - 84M (↑ 11%)
8) 2022 - 92M (↑ 10%)
9) 2023 - 97M (↑ 5%)
10) 2024P - 101M (↑ 4%)

Big question #5: Which streaming service has the most listeners?

Share of U.S. households that use each music service:
1) YouTube - 62%
2) Amazon Music - 37%
3) Spotify - 34%
4) Pandora - 25%
5) Apple Music - 24%

Big question #6: How large is the music industry?

U.S. music industry retail revenue (YoY growth) according to the RIAA:
1) 2014 - $6.7B (↓ 4%)
2) 2015 - $6.7B (↑ 0%)
3) 2016 - $7.6B (↑ 13%)
4) 2017 - $8.8B (↑ 16%)
5) 2018 - $9.7B (↑ 10%)
6) 2019 - $11.1B (↑ 14%)
7) 2020 - $12.2B (↑ 9%)
8) 2021 - $15.0B (↑ 23%)
9) 2022 - $15.9B (↑ 6%)
10) 2023 - $17.1B (↑ 8%)

Wow: If you adjust for inflation, the recorded music market is 36% lower than at its peak in 1999 ($27B).

Flashback: Billion Dollar Tours And The Economics of Modern Music

Big question #7: How do streaming music services make money?

Share of revenue for digital music services (% of total):
1) Subscription -  $12.3B (84%)
2) Advertising - $2.3B (16%)
3)Total -$14.6B

Why this matters: The advertising market for digital music ($2.3B) is roughly where streaming TV was in 2017 ($2.8B).  The big difference is the growth rate.  Streaming TV ads grew at an annual growth rate (CAGR) of 56% between 2017-21, while Activate Consulting projects digital music ads will grow by 4% annually between 2024-28.  From a similar size, streaming TV ads grew at 14X the rate of digital music ads.

FYI: Spotify had its first profitable year in 2024.