Demand and supply side effects of COVID-19 on music streaming

Restrictions imposed to fight the Covid-19 pandemic dramatically changed life. This affected the entertainment industry with consequences on the demand (consumer behavior in terms of quantity and preferences) and supply side (quantity of published products). Suffering from revenue losses because of canceled live events due to Covid-19, the music industry heavily relied on streaming revenues so we investigate how the lockdowns and other restrictions affected demand and supply within the music streaming industry. Using daily Spotify streaming data, as well as the MusicBrainz encyclopedia, we empirically investigate changes in the number of streams per day, listening preferences (demand side), and the number of releases (supply side) for the United States, Germany, Brazil, and Indonesia. For the demand side, the results imply that lockdown measures led to a decrease in the total number of streams per day. This coincided with country-specific changes in music preferences such as a short-term increase in the consumption of happy music. On the supply side, a global increase in songs released with increasing lockdown measures was found. Although most effects mitigate over time, they lead to serious ongoing financial consequences for artists, record labels, and streaming services.