Listening to music is cheaper and easier than ever, but most songs are largely ignored

We live in an age of unparalleled musical discovery and easy and cheap, often free, access to the world's music. Listeners have never had it better. Luminate, the company that tracks music streaming and sales worldwide, reported on it Year End Report 2023 that its database of ISRCs – international recording codes, the identifiers given to unique recordings that allow them to collect royalties – reached 184 million in 2023.

But most of these songs barely register with listeners. Of those 184 million tracks, 60% – 109.5 million – weren't streamed enough times to pay for a cup of coffee. About 16% — 30 million tracks — were streamed between 101 and 1,000 times. Another 18% – 33.9 million – were only streamed up to 10 times.

For companies dealing with the deluge of new music, the most troubling statistic is the number of tracks that are completely ignored. A quarter of those 184 million tracks—45.6 million—were never played once, according to Luminate. That's 45.6 million tracks with official ISRCs, available through one of the many digital distributors and taking up server space, that didn't get a single play last year. Not long ago, 45.6 million was the entire licensed catalog of a streaming service!

A few decades ago, the promise of streaming — as popularized by the 2006 book The long tail — was niche music's ability to find an audience. No longer faced with limited shelf space at a retailer, consumers could explore deep catalogs and find music they loved instead of buying whatever was readily available.

The economics of streaming are what help get more music heard. On a streaming service, the cost of listening to one more song is zero. At most, it's worth the time you spend listening to the song. With downloads, the cost of enjoying one more song is 99 cents (or $1.29 for the most popular tracks). The all-you-can-eat streaming service's flat fee means people don't have to pay more to consume more. Ad-supported streaming doesn't even have a flat fee — the cost of listening is the cost of waiting through an ad.

The low cost of streaming, while great for discovering music and falling down musical rabbit holes, was never a guarantee that a recording would find an audience. In written testimony in 2016 at the Copyright Board, Will Page, then Spotify's CFO, noted that in 2013, 20% of Spotify's 20 million track catalog was not streamed. Spotify “doesn't just increase the sheer number of tracks available to the public,” Page wrote, “it makes sure music can actually be heard.”

Well, not everything was heard. A fifth of a catalog that remains untouched is a big gap, but it was an improvement: Page also noted that a 2008 UK study found that more than 80% of digital tracks went unsold. Just because digital distribution and cheap recording tools lowered the barriers to entry didn't mean people would buy the music. However, streaming has allowed more music to be heard. But as the volume of music released annually skyrocketed, the number of tracks heard deepened dramatically. In 2013, when Spotify's catalog had 20 million tracks, only 4 million didn't receive a single stream. Last year, Luminate counted 11 times more tracks across all streaming services that didn't receive a single stream.

Streaming platforms, with all their playlists and ability to personalize the listening experience, can't get attention for every new recording. The best business decision seems to be to guide listeners to music they will likely enjoy. Playlists are popular places to find new music, but the most popular ones only cover a small portion of the most popular new releases. According to Chartmetric data shared with Advertising sign, there were 5,256 unique tracks on Spotify's New Music Friday playlist last year (it currently has 4.8 million followers). Chartmetric tracked about 8.4 million tracks released in 2023 on Spotify last year (it doesn't track every track uploaded to the service). That means 0.06% of those new releases found their way onto New Music Friday. A new track was even less likely to appear on Spotify's Top Hits playlist (34.6 million followers), which had only 201 unique tracks in 2023.

Of course, Spotify and other streaming platforms have much more than just these two playlists, as well as personalization capabilities and algorithm-based tools to introduce people to music. And there's some evidence that listeners are branching out far beyond the more popular tracks.

According to Luminate data shared with Advertising signthe share of the top 10,000 tracks in the US in total on-demand audio streams decreased from 50.4% in 2018 to 40.3% in 2023. Advertising signAs streaming exploded over those six years, the 10.1 percentage point swing equates to 377 billion on-demand audio streams moved from the top 10,000 tracks to less popular music, according to the estimate. This is a collective victory for today's artists, hobbyists, bedroom producers, aspiring professionals and working-class musicians — and a more modest victory for any artist's royalty income.

But 38 million new pieces a year seem to have broken the system. These services reach far more users today than they did seven years ago. People have shifted listening time from proprietary media (CDs, downloads) and radio to streaming. And yet, with more streamers and more time to stream, a quarter of all commercially available tracks received zero streams in 2023.

There are financial implications in this sea of ​​unheard and rare music. The marginal cost of server space is small, but the cost of managing music at this scale is not zero. Personnel must be hired to build and maintain systems that absorb traces, manage assets, and handle accounting rights. Cloud storage for tens of millions of pieces must be achieved with little to no financial value. If a quarter of products don't sell because supply and demand don't match, that's big dead weight loss in the industry. This has not been lost on labels, distributors and streaming platforms, of course. One solution was to adopt new royalty calculations that set a minimum flow threshold to receive royalty payments.

None of this is surprising. ISRCs are cheap for an artist to acquire and it's never been easier to record a song and upload it to a digital platform. There will continue to be a mismatch between the supply of music and the demand of listeners for that amount of music. The question is what the music industry wants to do about it.