The future of streaming

The future of streaming

Key vocabulary

Match the words to their definitions

Multiple Choice

A data transmission system used for high-speed internet access

• a household

• ownership

• broadband

• royalty

• a rush

Multiple Choice

A percentage of the revenue from the sale of a book, music CD, etc. paid to the creator or author

• a household

• ownership

• broadband

• royalty

• a rush

Multiple Choice

A person or group of people who occupy one place of living

• a household

• ownership

• broadband

• royalty

• a rush

Multiple Choice

Hurrying to do something

• a household

• ownership

• broadband

• royalty

• a rush

Multiple Choice

The state of possessing something

• a household

• ownership

• broadband

• royalty

• a rush

The future of streaming

Adapted from The Independent, by Doug Bolton, 14 June 2015

When was the last time you bought a CD? Or a DVD? If you are under 30 years old, it was probably a long time ago. For a new generation of music listeners, TV and film viewers, streaming services such as Spotify and Netflix have replaced trips to the music shop or even downloads from iTunes. Streaming is becoming popular just like satellite TV did 20 years ago. And investors are paying attention

According to reports, Spotify has hired the investment company Goldman Sachs to raise $500m (£330m) in fresh funding. They value the business at $8bn. According to the Amazon founder, Jeff Bezos, Amazon invested $1.3bn in 2014 in its streaming service Prime Instant Video.

Streamers are ready to fight for our attention — and our cash. "The main reason why the money is going to streaming is because consumers want it," says Ian Maude, who studies online media for Enders Analysis. "The growth rate for Spotify now is just unbelievable. They announced 12.5 million paid subscribers at the end of November and now they’ve got 15 million." 

Mr Maude says that the situation is similar to other streaming services such as Netflix, Prime Instant Video and NowTV. "In the UK, the number of households that own a TV dropped from 98 per cent to 96 per cent in just the last year," says Maria Ingold, who runs the video-on-demand consultancy Mireality. "Tablet ownership is up from 29 per cent to 46 per cent. For kids especially, their TV experience is on a tablet."

Technology is the reason for the rise of streaming. More portable devices and faster internet mean that it is a viable option. Ms Ingold was the chief technology officer of the video-on-demand business FilmFlex and points out: "We started 18 years ago doing video on demand. But when cheaper and faster broadband arrived, a lot of things have changed." 6. For the artists whose "content" supports streaming services, the transition to this new distribution model has been difficult in some cases . 

In film and television, streaming has brought new income. But for the music industry, the rise of platforms such as Spotify, Rdio and Deezer has resulted in even smaller earnings for artists. Musicians complained of the $0.99 per track price on iTunes, but that now seems a lot compared to the average $0.007 per stream royalty which Spotify pay to artists.

But for the music streaming services, it is also difficult to make much money. Spotify, which is the sector leader, made a loss of e57.8m (£43.5m) last year. Oleg Fomenko, who ran the music streaming application Bloom.fm, believes this is a trivial detail because Spotify is focusing on growth rather than profit. "The last man standing will make money," he says. "Right now it’s just a rush for that scale." 

Bloom.fm was one of the many Spotify competitors which lost the race for scale. It went out of business after its Russian investor decided to stop funding it last year. "Blinkbox and Sony’s Music Unlimited closing down shows that unless you have deep pockets, it is extremely difficult," says Mr Maude. "Investors are ready to give up very quickly if something isn’t working."

Despite questions over profitability and industry taxes, the sector shows no signs of slowing. Investors seem very ready to invest money in streaming and the appetite among consumers has not been satisfied yet.

Checking understanding

What do you remember?

Pick T (True) or F (False) for each of the statements below.

Multiple Choice

Streaming has become more popular than buying CDs.

• True

• False

Multiple Choice

Business people are investing in streaming because they think people will want it in the future

• True

• False

Multiple Choice

Kids prefer to watch TV on a television.

• True

• False

Multiple Choice

Streaming has become popular because of technological developments.

• True

• False

Multiple Choice

Musicians earn a lot of money with streaming.

• True

• False

Multiple Choice

Streaming services are very profitable at the moment.

• True

• False

Multiple Choice

Streaming services need a lot of funding to be successful.

• True

• False

Multiple Choice

The streaming business has not slowed down yet.

• True

• False

Find the word/phrase ...

1. noticing (phrase)

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2. capable of working successfully, feasible (adjective)

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3. a change from one thing to another (noun)

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4. one of several songs or pieces of music on a CD or other musical recording (noun, ) 

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5. unimportant (adjective) 

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6. a lot of financial resources (phrase)

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7. demand (noun)

Collocations

Match the verbs to the words below to form phrases from the text.

Multiple Choice

1. raise

• a. a business

• b. a loss

• c. funding

• d. growth

• e. new income

Multiple Choice

2. value

• a. a business

• b. a loss

• c. funding

• d. growth

• e. new income

Multiple Choice

3. bring

• f. out of business

• b. a loss

• c. funding

• d. growth

• e. new income

Multiple Choice

4. go

• f. out of business

• b. a loss

• c. funding

• d. growth

• e. new income

Multiple Choice

5. make

• f. out of business

• b. a loss

• c. funding

• d. growth

• e. new income

Multiple Choice

6. focus on

• f. out of business

• b. a loss

• c. funding

• d. growth

• e. new income