Streaming won the war for ears — now it has to win hearts. After years of explosive growth, the industry is now plateauing in mature markets. According to this recent Co-lab article by Musically and Tuned Global MD Con Raso, the next wave won’t come from more passive listening. It’ll come from turning listeners into creators — remixers, collaborators, and co-authors of the music they love. This isn’t a trend: it’s a transformation. And it’s already underway.
The music industry stands at a pivotal crossroads.
Over the past two decades, digital streaming platforms (DSPs) have transformed how we listen to music, making it more accessible – and ushered in a new age of music industry revenue growth. However, recent reports reveal that this growth is slowing, a signal that it’s time to innovate. This innovation is not just a strategy, but a necessity.
For instance, global music streaming revenue growth slowed considerably from previous years to 10.4% in 2023. And with rates flatlining in key mature markets like Scandinavia, a fundamental question arises: how can we evolve beyond simply delivering music to cultivating vibrant, interactive communities?
The answer lies in integrating the transformative power of social media — interactivity, connection, and creativity — into the core of music streaming experiences, creating new opportunities for growth and differentiation.
Learning from Social Media platforms
Social media platforms have excelled at creating sticky user experiences, driven by a simple formula: interactive features that validate identities and encourage participation and community through likes, shares, comments, or live interactions.
In contrast, DSPs primarily operate as functional tools — efficient at delivering music but lacking the participatory, community-driven features that turn casual listeners into passionate fans.
If we know why social has power, why hasn’t the music streaming ecosystem harnessed this force? Streaming platforms could unlock enormous potential by evolving social media’s playbook, transforming music listening into a shared and shareable experience rather than a solo activity.
The current revenue growth conundrum
Despite their ubiquity, streaming services face significant revenue challenges. The subscription model has plateaued in many markets, with global music streaming revenue slowing. For example, Universal Music Group recently reported a 30% drop in share value due to disappointing streaming growth. The Financial Times declared we’re facing a “streaming hangover” as the industry grapples with maturing markets and revenue plateaus. Ads aren’t the answer. Advertising revenue, while growing, also faces constraints: a recent report shows ad-supported revenue for DSPs declined by 4.2% year-over-year to $374.79 million.
Meanwhile, artists and rights holders continue to voice concerns over shrinking payouts, with scant fractions of a cent per stream. This concern will likely sharpen as AI-generated music pours into DSPs, reaching levels as high as 10%, according to some reports.
The solution does not lie in squeezing more out of existing revenue streams. We need to create entirely new streams that capitalise on deeper engagement and interactivity. By focusing on social features, DSPs can cultivate community-driven ecosystems where listeners actively participate, transforming user experiences into opportunities for sustained growth and differentiation. Increasing user time spent on platforms through interactive, community-centric features is one such pathway.
Social interaction within DSPs could incentivise users to spend more time on the platform, translating to higher ad impressions and greater subscription value.
Imagine a world where your streaming platform doesn't just play your favourite song but also connects you with others who love it — all while keeping the artist at the centre of the conversation.
Is music the next frontier for Social Media?
We’ve seen social platforms centred around video (TikTok), images (Instagram), and text (X/Twitter). Yet, audio and music have remained underexplored due to technical issues (working with audio is challenging for many users), though we already have a robust culture of playing with commercial music and audio, from remixes to mashups to karaoke.
Audio has had its moments — think Clubhouse, the audio-based social platform that surged during the pandemic — but has ultimately struggled to sustain engagement and build a lasting culture.
Social audio had difficulty weaving into users’ lives beyond the novelty factor. Music, however, is deeply embedded in our daily lives. We listen while commuting, working, exercising, and relaxing.
The challenge lies in harnessing this already-engaged audience and layering in social features that feel natural, valuable, and rewarding. These features would ideally create a new culture with its own norms and habits, the way Instagram changed our relationship to our phone’s photo rolls.
Imagine a world where your streaming platform doesn’t just play your favourite song but also connects you with others who love it — all while keeping the artist at the centre of the conversation.
Bringing social interactions to streaming
How can DSPs achieve this vision? Here are some ideas to start:
- Social Listening Parties: Let users host or join live listening sessions where they can chat, share thoughts, and discover new music together. These moments are gaining steam on various services around the world, and fans love them. Think of it as a modern, digital equivalent of gathering around the radio.
- Interactive Playlists: Allow fans to create playlists together, vote on or react to tracks, and share their creations with the world. We’ve already seen the beginning of this kind of feature popping up on big services and niche apps. A more robust version may prove even more compelling for music lovers.
- Fan-to-Artist Interactions: Introduce features like artist Q&A sessions, live chats, or virtual meet-and-greets directly on the platform.
- User-Created Broadcasts: Empower users to become creators by broadcasting their playlists, mixing tracks, and adding voice commentary. This feature turns passive listeners into active participants, fostering a sense of ownership and creativity.
- Gamification: Reward users for engaging through achievements, leaderboards, or exclusive content unlocks tied to their listening habits or community contributions. Gamification taps into intrinsic motivations like competition and recognition, making the experience more rewarding and encouraging sustained engagement.
A case study in Social Radio
Tuned Global’s Social Radio shows how this interactivity works in practice.
By merging the power of music discovery with live, community-driven listening, Social Radio allows users to broadcast their favourite playlists, mix tracks, and add voice commentary, transforming them from passive consumers to active creators.
The experience is as simple as starting a live show with one click, enabling real-time interaction through comments and emoticons, and weaving in personalised audio effects for a fun and dynamic broadcast. Fan-DJs can discover new songs, add them to their favourites during live broadcasts, and connect with other music lovers in real time.
Social Radio is a technology that can be integrated seamlessly into any existing DSPs. Features such as live voice commentary, smooth track transitions, and the ability to customise broadcasts make it a versatile tool for creators and listeners. It enhances engagement and retention by turning music streaming into a social, interactive experience and it eliminates the need to switch between apps reducing user fatigue.
Social Radio provides DSPs with a powerful differentiator in an increasingly competitive market by fostering a sense of community and enabling unique content creation.
Why this benefits everyone
As we look to the future, the line between passive listening and active engagement is blurring. And the entire music ecosystem — artists, fans, and platforms alike — stands to benefit. This is one of the rare tides that could lift all boats in music.
For music lovers, interactive features make streaming more fun, meaningful, and social. For artists, it creates new avenues to connect with their audience and monetise their work. For DSPs, it boosts user retention, increases time spent on the platform, and unlocks fresh revenue streams through advertising and premium subscriptions.
Additionally, these features can potentially create new music habits and unique, user-generated content that could set a platform apart in a crowded marketplace. By fostering creativity and enabling fans to take ownership of their experience, platforms can carve out a distinct identity and stand out in an increasingly competitive landscape.
The next evolution of fan engagement isn’t just about delivering music; it’s about creating an ecosystem around music where fans feel seen, heard, and connected. The tools are already here. All it takes is for DSPs to embrace the future of music streaming and community.
Contact us to find out how your platform can empower fans to become creators — and drive the next wave of streaming growth.
This article was first published by Musically.
