How On-Demand Music Streaming Services Work. Guide to Create your Own Website using Music Sharing Scripts

I love listening to music. I have installed tons of music streaming apps on my smartphone.

You may ask, why a plethora of music streaming services on my phone? I can listen to the songs on any random app from the play store. In fact, most of them are even free to use with Ads showing up occasionally.

Here is the thing. Music lovers have this unique taste of genres, artists, streaming quality, and playback personalization. It’s really hard to get everything on a single app. If Apple Music can stream in the top-notch quality, there is no one who can beat the recommendations and continuous listening experience of Spotify. Same goes to the Social sharing feature of SoundCloud, and bests of the radio stations on Pandora, and add-ons on Amazon Prime. Many a time, I do not find some of my favorite artists or songs on other apps because of the exclusivity on a particular platform.

That’s why so many music streaming services are not just surviving but thriving in the market, that too in the same time frame. The market is full of bests of the services and everyone is trying it’s best to capture the biggest share from this pie of over $25.3 billion per year market.

In this article, I am going to explain how these music streaming services work, what are the technical aspects, legal complications of running a streaming business, and how even you can start your own music streaming service using an affordable music sharing script. In short, I can help you realize your dream of claiming a share from this multi-billion dollars industry.

Don’t know how much Pandora and Spotify paid back then to develop their websites and mobile apps and audio streaming software to set up their business, but I can tell, you won’t have to spend even the one percent of that. So let’s just know this business sphere from inside-out.

Types of Music Streaming Services in the Market

According to what major names have been offering, there are two major types of music streaming services: On-demand Music streaming and Radio streaming. Be advised that most of the popular names in the market offer both of these streaming services on their platforms.

Radio Streaming Services

Radio streaming is similar to the traditional radio channels broadcast in many ways but also quite different in some other verticals too. The first difference is the medium of connectivity. In fact, the name ‘Radio streaming’ is just for branding and there is nothing like Radio broadcasting here. Where traditional Radio broadcast occurs through radio waves, radio streaming uses the internet as a medium.

However, the way they work is quite similar to the traditional counterpart. You cannot choose which track to play now or next, but you can always switch to a channel to listen to something else. They use live audio streaming software solutions and network infrastructure to feed media files in the real-time. Think of it like a DJ in a club, who plays the songs as he/she finds them fit. Generally, you would not ask a DJ to play your own playlist.

For example, you can’t select a specific song to play on a Pandora radio station, but you can switch to other channels, or can also set your preferences for genres, songs, albums, bands, or artists. The platform will use its algorithm to analyze your preferences and curate a queue based on it.

On-Demand Streaming Services

The biggest names in on-demand music streaming are Spotify, Google Play Music, Apple Music, Amazon Prime, Sound Cloud, and Tidal. The tech behind on-demand streaming is the same as radio streaming. The only difference is in the user experience.

Instead of feeding you an already created playlist, they let you choose the specific tracks to play anytime you wish to. Even these services analyze your preferences to recommend certain playlists and tracks, but they also let you browse through them and select specific tracks to play next. You can create your custom queues, play them continually, shuffle through the tracks, and set specific tracks on repeat.

On-demand is the mainstream of music streaming today. They use on-demand audio streaming software and network infrastructure to stream the media files. Even Pandora knew that while introducing Pandora Premium for offering on-demand experience besides its free and iconic radio streaming services.

How the Music Streaming Business Works?| The Licensing Aspects

If you look through the business perspective music streaming has become quite an easy setup, unlike the old days. The first thing that comes to the mind while starting a music streaming business in the “licensing agreements’ and Copyrights laws.

You cannot simply upload a track and feed it to your users. There are laws and regulations associated with property rights and licenses to use a song for commercial purpose. You need to acquire the streaming rights before you can upload those tracks on your platform. In return, you would be paying royalties to the rights owners, which will give you the legal access to publish, reproduce, distribute, or make copies of the compositions.

There are two cases to licensing agreement in this regard:

Labels: When artists get in terms with a label and use its resources to compose, record, and release a song. In such a case, the track belongs to the label and holds the copyrights and distribution rights. Now with sole ownership, the can make any use of the song and also hold the rights to collect the revenue and other royalties.

Publishers: When artists compose and record a song without any label, but get in terms with a publisher to release the song. In this case, the intellectual property rights remain with the artists but managing rights goes to the publisher. The publisher will deal with the aspects like granting distribution rights, accounting, collecting royalties, copyright claims and others.

Independent & Community: When artists compose and record the songs independently, but use a community platform to release the song. The platform could be a social media channel or a community sharing site like SoundCloud, YouTube, Vimeo, Daily Motion, etc. In such a case, every right remains with the artist alone.

How to Get Music Streaming Rights?

As you saw above, the rights could remain with a single person/business or distributed across multiple levels. Depending on the kind of usage, you can contact with the following bodies to get the rights:

1. Labels like Sony Music, Universal Music Group, Warner Bros, etc.

2. Independent distributors who have contact with multiple labels and independent artists.

3. Branded Publishers, who are mostly the subsidiaries of the labels itself.

4. Independent artists who have not signed any label contracts.

As per your contract with these rights owners, you would get one or all of the following royalty models:

1. Pay-per-stream royalty

2. Percentage cut from overall streaming revenue

3. Instant payment for limited-time/permanent streaming rights

How much Royalty do Popular Music Streaming Services Pay?

It depends on various factors. If you are a well-known name and has a huge base of users, you can easily negotiate as labels and owners will approach you for uploading their tracks. However, if you are an infant business, it could be a tough path. Generally, labels prefer the platforms with huge user base so that they get the maximum exposure. So you might have to increase their margin to make a start.

· Pandora pays 70% of the revenue as royalty.

· Spotify pays 55% of the revenue to the labels.

· Apple Music Pays 58% of the same to the labels.

The percentage of revenue share varies from platform to platform, label to label, artists to artists and distributor to distributor. Please note that the royalties paid by these services could be in any of the models explained in the previous section. For example here is a rate distribution for pay-per-play model followed by popular names in the market:

How to Build your Own Music Streaming Platform?

As technology has evolved, developing a music streaming platform is not a big deal anymore. Now that you also know how the music industry works, and how much you would be paying to the rights owners, the biggest challenge is laying down a revenue model for earning. So when you are building your own audio streaming software, you need to give special consideration to your business model.

Let’s understanding everything in steps as we dive into the development part.

Step 1: Know How Music Streaming Applications Work

Music streaming is a complex infrastructure of hardware, software, networks, encoders, decoders, and other devices. Whenever an audio file is streamed, first it is converted into small chunks of several data packets using encoders which is then pushed to the network for transfer through the internet. Each data packet takes a definite route before it reaches to the buffer stream of the user’s device. Once the buffer has enough packets, they are decoded and played through a media player on the device. The process continues throughout the streaming session.

The entire process of encoding, decoding, routing, data transfer, and media playing is managed by dedicated service providers with their infrastructure. Each service is incorporated in audio streaming software through different APIs. For example-

1. Audio Codec APIs for encoding the media file into data packets.

2. Media server APIs for data transfer. CDN also falls into this category.

3. Decoder APIs for decoding the data packets and loading them to the buffer stream.

4. Media Player APIs for playing the decoded files in the buffer stream.

Step 2: Know the Types of music streaming applications

There are basically two types of music streaming applications you need to develop for starting a business.

· Web application. Also called WebRTC, which streams the music through a website interface.

· Mobile Application. They are the dedicated apps installed on a smartphone for music streaming.

So, you have to first decide if you want to serve as a website only or also want to release your mobile apps for better UX and user acquisition. I would recommend developing both WebRTC and mobile apps for Android and iOS.

Step 3: Know your business requirements and revenue goals

Revenue model: It’s crucial to know the ways of making money with a music streaming service. Following the business models of the top players in the market, I can suggest the following major revenue channels for a music app.

1. Ad-based revenue: Allow users to stream music for free, while you can make money embedding different types of Ads on the platform.

2. Subscription revenue: Ask for a monthly, weekly, or a daily membership from the users to enjoy your app.

3. Freemium model: Allow ad-based free access to limited features while also letting them acquire advanced features through premium membership plans. For example, allow HD streaming only to the premium members.

4. Packaged bundle model: Offer your subscription packaged with other value-added services. For example, Amazon Prime subscription is much more than a music streaming membership. This model is highly successful these days. I have seen ISP providers offering Amazon prime bundled with their internet plans. You can also get in terms with any such business.

Streaming Model: This is also the step where you need to decide the kind of streaming you are going to offer: Radio streaming or on-demand or both?

Access model: Decide the model of the platform based on the level of access given to the users. For example-

1. Community: You can select a community model like YouTube and SoundCloud if you want to let users upload their tracks and stream through your cloud storage.

2. Closed/ branded: You can select a branded model like Spotify and Apple Music if you want only the admins to upload tracks and let users stream them through their devices.

Step 4: Know the trends and essential features to include

Now that you have a business model, it’s time to conduct competition research and find out the trending features in the market. Also, you have to prepare a basic set of features as per your own business model. Here are some of the important features and trends I can recommend for a closed access platform:

Features for the users

· Create a user account

· Social login

· Search tracks, albums, artists, playlists, and genres.

· Play tracks with playback control

· Shuffle a playlist

· Set Repeat on tracks or playlists

· Dynamic bit-rate switching

· Create a custom queue or playlist

· Add more tracks to a playlist or queue

· Download tracks for offline listening

· Set preferred streaming quality

· Browse tracks in different categories

· Purchase membership plans

· Make on-site/in-app payments

· Browse recommended tracks or albums

· Mark favorite and browse tracks or albums

Features for the Admin

· Create multiple categories

· Upload tracks in multiple qualities

· tag them under different categories

· Embed Ads pre-roll and post-roll audio ads

· Embed banner Ads on the UI

· Create multiple subscription plans

· Set membership plan rules

· Integrated payment gateways

· Analytics for users, usage, and tracks

· Push notifications

· Recommendation algorithm

Additional features for community model

In case you want to build a platform like YouTube Music or SoundCloud with community access model, you would need the following additional features besides the above-mentioned ones:

· Social sharing

· Cloud Storage

· Report users

· Report tracks

· Copyright claiming

· Create user channels

· Follow a channel

· Unfollow a channel

· Comment on tracks

· Like a Track

· Dislike a track

Step 5: Find a great music sharing script matching your needs

That’s all! Now that you know the features you need, it’s time to head for Google search and find a great music sharing script nearest to your requirements.

What is a music sharing script?

These are ready-made software solutions being sold by different software vendors for creating music streaming websites and mobile apps on the go. You just have to find a good script, set it up using a GUI, and your music streaming platform would be ready.

For example, a Spotify clone script. You can purchase a Spotify clone script to get a ready-made solution like Spotify. It would mimic most the Spotify’s features and business models to give you a similar business experience.

Similarly, if you wish to start a community model music streaming business, you can purchase a turnkey SoundCloud clone script, which gives a similar UX and business model like SoundCloud. You can check out this StreamTunes- SoundCloud Clone script demo to see how a music sharing script works.

Note: A complete package of a script would offer you all the four crucial solutions:

1. Admin panel

2. WebRTC

3. Android Mobile App

4. iOS Mobile App

Step 6: Customize the script for additional needs and branding

Be advised that it’s not possible that all the ready-made music sharing scripts will have every feature by default. They present a minimalistic mimicry where the fundamental business model and features are replicated to set a platform.

After that, you might need to customize a script to accommodate your unique business ideas. You may also need to add some more features to make your platform competitive. Overall, the cost of customization will not be too much as you get most of the complicated aspects already completed. Even the essential APIs for encoding, decoding, data transfer, and media playing are already in-built in such scripts.

So, customize the platform as per your needs, revamp the UI to match it with your brand identity, and proceed to the next step.

Step 7: Host the solutions on the corresponding web servers

Once your platform is ready, you can host your cooked solutions on their corresponding hosts to make them publically available. For example, use a reputed web server to host the WebRTC and Admin Panel. Furthermore, host the mobile apps to their respected app stores: Android app to the Google Play Store and the iOS app to the Apple App Store.

Step 8: Upload, Connect with the cloud and Go live

Once hosted, connect your platform to the cloud storage for uploading your tracks. Please note that you should not use the web server host for storing the media files. You need to subscribe to a media server or CDN, which I already explained while talking about Media Server APIs. Once connected, you can begin uploading your acquired tracks and set your site/mobile apps live for the public.

Rest is all Marketing, User experience, and User engagement

Rest is all on your business process development. As per your marketing, business model, and value proposition, you would start getting users. I hope I was able to give a complete comprehension of the music streaming business operation. Finally, a clone script could be a great alternative to developing your websites and mobile apps from scratch. The only major task is finding a good music sharing script or clone script with top-notch audio streaming software to fit right into your business requirements. Hopefully, the information in this article will lead you to an efficient script in the market.

Entrepreneur

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