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Music streaming sales outstrip digital downloads for first time

Wed 23 Mar 2016

Music streaming

Revenues from music streaming has finally surpassed those of digital downloads, according to a report released by the Recording Industry Association of America (RIAA).

Its ‘News and Notes on 2015’ review [PDF], released yesterday, shows that music streaming in the U.S. brought in 34.3% of the overall revenue for the year – generating $2.4 billion (approx. £1.7 billion) out of a total $7 billion. If the numbers are accurate, streaming beat music downloads by 0.3%.

This growth, however modest, is an encouraging result for those in the industry backing streaming services like Spotify and the new Apple Music, over digital stores such as iTunes. Revenue from digital album downloads dropped 5.2% in 2015, and sales of singles declined 12.8%.

The RIAA also advised that paid subscription services were the biggest – and fastest – growing portion of the streaming market. With the launch of hyped services from Apple Music and new platform Tidal, revenues in 2015 from paid subscribers grew 52% to $1.2 billion. The number of paid subscriptions also surged 40% to an average of 10.8 million for the year.

Despite this significant boost for streaming, many remain unconvinced of its value. In a blog post, RIAA chairman and CEO Cary Sherman commented: ‘In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meager — far less than other kinds of music services. And the problem is getting worse.’

He offered the graph below as a representation of the ‘alarming’ disparity between the growth in the number of ad-supported streams, and the growth in revenues generated by these:

Screen Shot 2016-03-23 at 11.14.48

Sherman continues to note that physical sales in 2015 made $416 million in revenue, compared with the $385 million brought in by ad-supported streaming (such as Spotify’s basic listening tier) – a problem for many artists who believe the streaming business does not fairly compensate them for their music.

In 2014, Taylor Swift famously refused to offer her latest album 1989 on Spotify, and removed her back catalogue of albums from the platform, arguing: “I just don’t agree with perpetuating the perception that music has no value and should be free.”


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