How Streaming Services Are Changing How Artists Make Music and How We Experience It

By Rose Cunningham

The music industry has undergone a dramatic transformation over the past two decades, driven by the rise of streaming services like Spotify, Apple Music, YouTube, and Tidal. These platforms have revolutionized how we consume music, giving listeners instant access to millions of songs at their fingertips. But this convenience has come at a cost, especially for artists. Streaming has not only reshaped the economics of music but also forced musicians to rethink how they create, market, and monetize their work. With streaming royalties offering minimal payouts, artists are increasingly turning to alternative revenue streams, like concert tickets, merchandise, and multi-release albums. At the same time, the way we experience music has evolved—from owning physical collections of CDs and vinyl to curating endless digital playlists.

This article explores how streaming services have changed the music industry, from their impact on artist revenue to their influence on music creation and fan engagement. It also examines the rise of collectibles and multi-release strategies as artists adapt to this new era.

The Economics of Streaming

Streaming services have become the dominant mode of music consumption globally. According to the International Federation of the Phonographic Industry (IFPI), streaming accounted for 65% of global recorded music revenue in 2023, with over 600 million paid subscribers worldwide. However, while streaming has democratized access to music and expanded audiences for many artists, its financial model heavily favors platforms and record labels over creators.

Here are some key figures that highlight the challenges:

Spotify pays artists between $0.003–$0.005 per stream, meaning an artist needs approximately 250 streams to earn just $1.
Apple Music offers slightly higher payouts at $0.01 per stream, but even this requires 100 streams for a single dollar.
On average, a song needs to be streamed 1 million times on Spotify for an artist to earn roughly $3,000–$5,000—a figure that is often split among record labels, producers, and songwriters.

Compare this to the pre-streaming era when fans would purchase CDs for $10–$15 or vinyl records for $20–$35. Manufacturing costs for CDs were as low as $1–$2.50 per unit, leaving artists with profit margins of up to 80%. Vinyl records were more expensive to produce but still offered significant revenue potential. This stark contrast underscores how streaming has devalued individual songs in monetary terms.

For independent artists without major label backing or high streaming numbers, these payouts are often insufficient to sustain a career. As a result, many musicians are shifting their focus toward live performances, merchandise sales, and innovative marketing strategies.

How We Once Enjoyed Music: From Physical Collections to Digital Libraries

Before streaming services became ubiquitous, consuming music was a tactile experience. Fans would visit record stores to browse through shelves of CDs or vinyl records, carefully selecting albums based on cover art or recommendations from friends. Owning physical music was deeply personal—whether it was a shelf lined with jewel cases or a crate filled with vinyl LPs.

These physical formats often came with extras like liner notes, lyrics booklets, and exclusive artwork that added value to the listening experience. Collecting music was as much about owning a piece of art as it was about enjoying the songs themselves.

In contrast, streaming has shifted us away from ownership toward access. Today:

Listeners can explore over 100 million songs on platforms like Apple Music and Spotify.
Algorithm-driven playlists such as Spotify’s "Discover Weekly" or Apple Music’s "For You" introduce users to new tracks tailored to their tastes.
Physical storage limitations no longer exist; users can carry entire libraries in their pockets via smartphones.

While this convenience is unparalleled, it has also changed how we engage with music. Songs are now consumed as part of playlists or background soundtracks rather than standalone works tied to physical albums. The emotional connection that came with owning a CD or vinyl record has been replaced by an endless digital library that feels less personal, though there has been a new trend where this nostalgia and passion for collectables has re-emerged, and I’ll discuss this shortly.

Concerts: The Lifeblood of Modern Musicians

With streaming royalties providing minimal income for most artists, live performances have become one of the most reliable revenue streams in the modern music industry. Touring now accounts for up to 80% of income for many musicians—a figure that underscores its importance in today’s landscape where Spotify and Apple offer dismal royalty rates.

Streaming platforms have indirectly contributed to this trend by providing data on where an artist’s fan base is concentrated geographically. For example:

Spotify’s "Fan Insights" tool allows artists to see which cities generate the most streams for their music.
This data helps musicians plan tours strategically by targeting regions where ticket sales are likely to be highest.

The numbers speak for themselves:

In 2024 alone, Live Nation reported that 151 million people attended nearly 550,000 events worldwide, generating over $23 billion in revenue.
Major tours like Taylor Swift’s Eras Tour grossed over $1 billion, breaking records as one of the highest-grossing tours in history.

Beyond ticket sales, concerts also serve as prime opportunities for merchandise sales. Many artists use live shows to sell exclusive items such as T-shirts, hoodies, posters, and vinyl records that fans can only purchase at events. These items not only boost revenue but deepen fan loyalty by offering tangible connections to the artist.

Merchandise: A Growing Revenue Stream

Merchandise has become an essential component of an artist’s income in the streaming era. The global music-merchandise market is projected to reach $16.3 billion annually by 2030, driven by demand for unique and collectible items.

Taylor Swift is one of the most prominent examples of how merch can be used creatively:

For her Eras Tour, Swift released limited-edition clothing collections tied directly to her tour stops.
Her exclusive "72-hour merch drops" created urgency among fans and sold out almost instantly.
Collectibles like her Midnights album variants included unique artwork and bonus tracks designed specifically for superfans.

Billie Eilish has also embraced innovative merch strategies:

Her Happier Than Ever album featured vinyl variants made from recycled materials—a nod to sustainability.
Eilish partnered with brands like Nike to release co-branded apparel collections tied to her tours.

Ed Sheeran takes a similar approach with his themed album editions:

His Mathematics Tour featured multiple album variants with different cover art and bonus content.
These collectibles encouraged fans to purchase multiple versions of the same album.

Multi-Release Albums: Sustaining Engagement

Streaming platforms reward frequent releases over traditional album formats. This has led many artists to adopt multi-release strategies by dropping singles or EPs over time instead of releasing full albums all at once.

Taylor Swift has mastered this approach with her re-recorded albums under "Taylor’s Version." These re-releases include previously unreleased "vault tracks," minor tweaks to lyrics or instrumentals, and collectible items like posters and exclusive covers. This strategy not only allows Swift to reclaim ownership of her music but also extends each album’s lifecycle through continuous engagement. Many other artists are writing more singles and EP’s (extended playlists) to maintain their momentum, especially as younger artists like Chloe Ament and what has been dubbed the “Tick Tok generation” try to break into the music industry.

The Rise of Collectibles in Music

In response to declining physical album sales, collectibles have become increasingly important in the streaming era:

Taylor Swift’s collectible CDs featuring unique artwork and bonus tracks have turned albums into coveted artifacts, with her latest “Tortured Poet’s Department” album having 36 variants!.
Billie Eilish’s sustainable vinyl variants appeal not only to collectors but also environmentally conscious fans.
Ed Sheeran’s themed editions encourage superfans to own multiple versions of his albums.

These items are often produced in limited quantities, creating scarcity that drives demand among fans. They not only generate additional revenue but also foster deeper emotional connections between artists and their audiences.

Challenges and Opportunities in the Streaming Era

While streaming offers unprecedented exposure for artists globally, its economic model presents significant challenges:

Challenges:

Low payouts per stream force artists to rely on alternative revenue streams like concerts and merchandise.
Algorithm-driven trends can limit creativity by incentivising formulaic production styles.

Opportunities:

Data analytics from streaming platforms help artists understand audience preferences and plan tours effectively.
Merchandise sales provide a new income streams that complement streaming revenue.
Multi-release albums allow musicians to maintain engagement while exploring creative flexibility.

Conclusion: A New Paradigm for Music Creation

Streaming services have fundamentally changed how we experience music—offering unparalleled convenience while reshaping how artists create and monetize their work. While these platforms provide instant access to millions of songs globally, they have also devalued individual tracks financially—forcing musicians to adapt through concerts, merchandise sales, multi-release albums, and collectibles.

Artists like Taylor Swift, Billie Eilish, Ed Sheeran, and BTS are revealing how creative marketing can turn challenges into opportunities in our “streaming era”.

As technology advances further—perhaps through AI-generated playlists or virtual reality concerts—the future will undoubtedly bring even more changes. For now, one thing remains clear: adaptability is key in navigating this brave new world where art is being forced to meet algorithms.

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