Excerpts from preliminary research on the economics of streaming music under the supervision of Lorin Hitt

1. Brandon Newberg, Steve Levick
Economics of Streaming Music

2. Music Industry - Overview
• People are spending less on music
– Recorded music revenue is at an all time low
• Distribution has been disrupted
• Recording costs are dropping dramatically
• Marketing expenses are still high
• Need for intermediaries is still high
• Consumption seems greater than ever

3. The Access Model
Questions
• Will subscription-based
streaming services make
up for the loss in physical
revenue?
• Do these services change
consumption? How are
people using them?
Available Data
• Music Sales (1973-2012)
(RIAA)
• Friends’ Streaming Habits
(Facebook)

7. Friends’ Streaming
• Facebook Graph API & Python SDK
• Using “music.listens” call, sorting
paginated results, iterating through all
friends
• Results in a directory of users in
Brandon’s network and a history of their
streaming activity from connected music
applications (Spotify, Songza, 8tracks etc.)

8. Final Data Structure
A User’s Play History
"3400262": {
"Total Plays": 1,
"Playlist Plays": 0,
"Radio Plays": 1,
"Name": "RohanSachdeva",
"History": [
{
"Playlist": false,
"End": "2012-11-03T23:33:00+0000",
"Name": "GanyoMaada",
"Start": "2012-11-03T23:33:00+0000",
"Source": "Songza",
"Radio": true,
"sID": "254530388000913"
}
]
}
A Song’s Play History
"Poetic Justice": [
{
"Playlist": false,
"End": "2013-03-21T23:53:27+0000",
"Name": "Poetic Justice",
"Start": "2013-03-21T23:48:27+0000",
"Source": "Spotify",
"Radio": false,
"sID": "152032941608723",
"From": "577667742"
},
{
"Playlist": false,
"End": "2013-03-18T03:02:16+0000",
"Name": "Poetic Justice",
"Start": "2013-03-18T02:59:42+0000",
"Source": "Spotify",
"Radio": false,
"sID": "152032941608723",
"From": "577667742"
}
]

9. First Pull
• 190 Users
• 31,754 Plays
• Up to 275 Plays (11 pages) per user
• Heuristics:
– Application Usage
– Plays from playlist v. radio v. normal

12. Second Pull – Heavy Users
• 95 Users
– All of whom had more than 11 pages of data
• 57,663 Plays
• Up to 650 Plays (26 pages) per user
• Heuristics:
– Application Usage
• Tracked application “runs” to analyze effect of switching
– Plays from playlist v. radio v. normal

15. Analyzing Runs
UserID : 6205900, Total Time Span: 12 days, 20:27:51
Run 1, Application : Spotify, Plays: 285, Over Time: 4 days, 21:54:50
Run 2, Application : Deezer, Plays: 2, Over Time: 0:03:22
Run 3, Application : Spotify, Plays: 209, Over Time: 3 days, 21:59:48
Run 4, Application : Deezer, Plays: 1, Over Time: 0:00:00
Run 5, Application : Spotify, Plays: 153, Over Time: 2 days, 3:37:38
UserID : 1044180282, Total Time Span: 366 days, 11:42:25
Run 1, Application : Songza, Plays: 2, Over Time: 0:03:00
Run 2, Application : Spotify, Plays: 5, Over Time: 9:38:13
Run 3, Application : Songza, Plays: 2, Over Time: 0:05:00
Run 4, Application : Spotify, Plays: 395, Over Time: 297 days, 14:03:28
UserID : 644335791, Total Time Span: 503 days, 1:56:12
Run 1, Application : 8tracks, Plays: 25, Over Time: 10:27:20
Run 2, Application : Spotify, Plays: 63, Over Time: 5 days, 2:19:28
Run 3, Application : 8tracks, Plays: 6, Over Time: 0:17:42
Run 4, Application : Spotify, Plays: 7, Over Time: 0:28:51
Run 5, Application : 8tracks, Plays: 3, Over Time: 0:26:45
Run 6, Application : Spotify, Plays: 29, Over Time: 21:33:54
Run 7, Application : 8tracks, Plays: 37, Over Time: 174 days, 8:36:42
Run 8, Application : Spotify, Plays: 480, Over Time: 313 days, 13:13:17

16. Streaming Habits v. Billboard Hot
100
• How does the streaming population
consume music compare to the general
public?
• Do streaming habits drive what is in the
Billboard 100 or does the Billboard 100
drive streaming habits
– Are they even related?

17. Billboard Test 1
• Compare 3 weeks of Hot 100 Charts to
our streaming stats for those weeks
• Try to find a relationship between their
respective ranks
– Selected Apr 27, Feb 2, Nov 10 (12 weeks
apart)

18. Nov 10
• 61 users
• 4081 songs
• 6133 plays

19. Apr 27
• 61 users
• 5156 songs
• 8422 plays

20. Feb 2
• 59 users
• 5536 songs
• 8919 plays

21. Feb 2 Linear Regression

22. Billboard Test 2
• Compare 150 days (~five months) of Hot
100 Charts to our streaming stats
• Examine the popularity of specific songs in
each group
• Try to find a relationship between a song’s
streaming usage and its position in the Hot
100 chart over time

23. Test 2 – 150 Days of Streaming
• 115 Users; 168,214 Plays; 41,856 Songs
• 21 Billboard Charts
• Tracked Five Songs
– “Poetic Justice”
– “F**kin Problems”
– “Sweet Nothing”
– “Clique”
– “Home”

24. Test 2 - Population
0
2000
4000
6000
8000
10000
12000
14000
Total Plays Per User, Over 150 Days

25. Test 2 - Population
0
50
100
150
200
250
300
Breezeblocks
Fineshrine
GetLucky-RadioEdit
Fitzpleasure
Suit&TiefeaturingJAYZ
SomethingGood
It'sTime
Retrograde
Tessellate
RescueSong-RACRemix
TheSuburbs
BetaLove
Sun
HoldinOn
Insanefeat.MoonHoliday
BackseatFreestyle
DissolveMe
LoveMe
OdeToViceroy
AllOfMe
WhileI'mAlive
Don'tYouWorryChild(RadioEdit)[feat.…
BlurredLines
MyKindofWoman
StartedFromtheBottom
StubbornLove
Open
PolishGirl
Belispeak
PoeticJustice
SameLove-feat.MaryLambert
Marathon
ThisHeadIHold
FameOrShame?
PusherLoveGirl
YourDrums,YourLove
HoldOn
Moves
Promises
Entertainment
LetItGo
Sleeplessfeat.JezzabellDoran
Waste
I'llBeAlright
Default
StayClose
CigarettesInTheTheatre
StrawberryBubblegum
HoHey
LazyEye
Top 100 Song By Plays, Over 150 Days

26. Test 2 - Population
0
5
10
15
20
25
30
35
40
45
50
Intro
Angels
SweetNothing
F**kin'Problems
Radioactive
ThriftShop-feat.Wanz
HigherGround
Suit&TiefeaturingJAYZ
Tessellate
DissolveMe
BackseatFreestyle
Mirrors
HoldinOn
PoeticJustice
It'sTime
StayClose
Fineshrine
Adorn
Pyramids
Daydream
Promises
Sintra
1901
TwoWeeks
ThisHeadIHold
TheSuburbs
OdeToViceroy
SkinnyLove
AllOfMe
Dreams
Clique
Matilda
HeavyFeet
SweetLife
SuperRichKids
Sleeplessfeat.JezzabellDoran
BlackSpot
Try
Fantasy
Daylight
Diamonds
Entertainment
SanFrancisco
Holiday
LeftAlonefeat.ChetFaker
Weekend
Trouble
Baby
BeAboveIt
Change
Top 100 Songs By Users , Over 150 Days

27. 0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Sweet Nothing” Popularity, from Billboard
0
2
4
6
8
10
12
14
16
18
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Sweet Nothing,” Streaming Stats
Plays
Users

28. 0
2
4
6
8
10
12
14
16
18
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Sweet Nothing,” Streaming Stats
Plays
Users

29. 0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“F**ckin’ Problems” Popularity, from Billboard
0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“F**kin' Problems” Streaming Stats

30. 0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“F**kin' Problems” Streaming Stats
Plays
Users

31. 0
10
20
30
40
50
60
70
80
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Poetic Justice” Popularity, from Billboard
0
2
4
6
8
10
12
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Poetic Justice” Streaming Stats

32. 0
2
4
6
8
10
12
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Poetic Justice” Streaming Stats

33. 0
10
20
30
40
50
60
70
80
90
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Clique” Popularity, from Billboard
0
2
4
6
8
10
12
14
16
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Clique” Streaming Stats

34. 0
2
4
6
8
10
12
14
16
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Clique” Streaming Stats

35. 0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Home” Popularity, from Billboard
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Home” Streaming Stats

36. 0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Home” Streaming Stats

37. 0
2
4
6
8
10
12
14
16
18
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“Sweet Nothing”
Plays
Users
Hot 100 Rank

38. 0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
“F**kin' Problems”

39. Conclusions & Observations
• Streaming may increase diversity of
consumption
– Distribution of listening in our sample is flat
• Average plays per song is 4
• The difference between being the most played track and the
100th track is .1% of all plays
• The Hot 100 is a poor representation of
popularity
– Radio impressions are a major component and radio
play is often based on money

40. Further Questions
• If streaming does increase diversity of
consumption, what element of the services is
responsible?
– Likely a combination of lowered sampling costs and
an increase in social influence
• Will adoption of these services “save” the
industry?