General Environment of the Music Streaming Industry

General Environment of the Music Streaming Industry
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General Environment of the Music Streaming Industry
The internet is undoubtedly the biggest disruptor since the discovery of the steam engine. It has revolutionized how people communicate, receive information, socialize, and even conduct their shopping. The internet has had an adverse effect on the music industry, shifting it from the traditional forms of selling physical records in the form of vinyl, cassettes, or CDs, to the emergence of online record stores, and today’s music streaming services (MSS). Although the internet makes MSS an easier alternative for music consumers, there are many other external factors within the general environment that affect the performance of MSS companies. The success of MSS companies such as Spotify and Apple Music thus largely depends on their adaptability to the changing macro forces.
Music streaming services accounted for 65% of the total shares of global music revenues in 2021 (UNESCO, 2022). However, despite the rapid growth of this industry, industry players have to stay on their feet and ensure they are up to date with the macro-environmental forces if they are to survive in the MSS industry. 2020 was a turning point in the industry since the declaration of lockdowns across the globe meant that most consumers could only get their goods or services from online sources. Consequently, the MSS industry saw a rapid rise in subscriber numbers, as consumers sought to acquire their favorite music at the touch of a button (Grand View Research, 2022: UNESCO, 2022). The COVID-19 pandemic thus played a major role in expanding the MSS market.
Changes in technology also impact how consumers react to online services such as music streaming. One such technology is 5G, which promises users higher internet speeds that make streaming easier. One of the effects of the inception of 5G is that some music streaming companies have availed higher quality content to their consumers (Grand View Research, 2022). Other technologies such as Augmen...