U.S. Music Industry Revenue Grew 11% in 2016 Thanks to Streaming Music Services

Estimated retail revenues from recorded music in the United States grew 11.4 percent to $7.7 billion in 2016, according to the Recording Industry Association of America. Streaming music revenue from companies like Spotify, Apple, Pandora, and YouTube accounted for 51.4 percent of that total and for the first time, contributed the majority of the year's revenue.


At 11 percent growth, the music industry saw the biggest increase it's had since 1998, a time when six times more CDs were sold than today. Overall revenue continues to be half of what it was in 1999, and revenues from traditional unit-based sales, including physical products and digital downloads, have continued to decline. Physical sales accounted for just 21.8 percent of music industry revenue in 2016, while digital downloads and ringtones made up 24.1 percent.

Total revenues from streaming platforms were up 68 percent year over year and came in at a total of $3.9 billion. Streaming revenues have seen major growth over the last several years, having made up just 9 percent of total industry revenues in 2011.


All categories of streaming, including paid subscriptions, SoundExchange distributions, and on-demand ad-supported streams, saw growth. Paid subscriptions had the largest growth, accounting for $2.5 billion of the $3.9 billion made from streaming music.

Growth was driven by very strong new user adoption, as the number of paid subscriptions to full on-demand services grew 109% to average 22.6 million for the year, compared with 10.8 million in 2015. Adoption was driven by growth from both new and existing services, as it was the first full year of results for Apple Music, and other leading services like Spotify Premium grew as well.

In a blog post on Medium, Recording Industry Association of America CEO Cary Sherman points out that Apple Music pays the highest royalties to artists, more than Spotify and significantly more than YouTube, which Sherman claims exploits a "legal loophole" to pay creators at low rates.


According to Sherman, while 2016 was "year of significant progress" for the U.S. music business, "recovery is fragile and fraught with risk." Streaming services must make up losses from CDs and digital downloads, and the growth isn't there yet. "Much rides on a streaming market that must fairly recognize the enormous value of music," he writes.

Top Rated Comments

(View all)
Avatar
44 months ago

I still don't understand how "ownership" got so devalued, at least with music and software.

Why would I want to pay $10.99 for an album (10 songs) when I can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me
Score: 18 Votes (Like | Disagree)
Avatar
44 months ago


Why would I want to pay $10.99 for an album (10 songs) when i can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me

Only you can answer that question for yourself.

Personally, I don't have the time to listen to 47m songs, and only a fraction of those are likely even worth a second listen or they would have more buzz. I have a nice collection going back 25 years and of course slowly growing annually with new material, though no where near the rate when I was young. Pay once never again. When I'm 50, 60, 70, still no additional cost to listen. No worries about having to keep paying ad infinitum for the privledge. And yes, still pleny of avenues to explore new music at zero cost.

And the bonus is that becaue I ripped from CD the quality is superior to anything that AM or Spotify streams -- especially important when listening at home. Also if a licensing issues errupts between a band or label and a streaming service that music goes poof. But it's still in my collection available for listening whenever I wish.
Score: 15 Votes (Like | Disagree)
Avatar
44 months ago

It's still royalties dude. Someone is getting paid and I bet my ass the artist is getting paid. So what difference does it make how much they get paid? If they have a problem, find a new ****ing job. The artist makes more in royalties than I did in the Navy and these pussies have the gaul to complain? Cry me a ****ing river.

My band played over 500 shows, opened for some of the biggest names imaginable for a couple of years (2007-2010). We worked day and night to songwrite, record, design, market, hussle, etc... Our live shows were killer, we got offered record deals, took a chance, quit our jobs, and really did 1000x better than our fellow Bay Area bands did, even got songs into TV, and a few major films. Despite all of our work, the money we made rarely even covered cheap motels, gas, oil changes on the van, replacement cables, and maybe eating subway once a day. Once it became obvious that there was nothing physical to sell anymore at live shows, we had to give up, for those 10-20 cd sales each night meant the difference between a motel vs. sleeping in the van. Being in a band is amazing, but streaming services are a joke to 99.9% of musicians.
Score: 6 Votes (Like | Disagree)
Avatar
44 months ago

And here I was hoping the MAFIAA would be dismantled soon enough with the new ability to self-publish. Guess I was wrong.
Score: 6 Votes (Like | Disagree)
Avatar
44 months ago
I still don't understand how "ownership" got so devalued, at least with music and software.
Score: 6 Votes (Like | Disagree)
Avatar
44 months ago
Half the income comes from streaming now? Wow.

Glad apple is paying the artists. Love finding so many. I still buy the digital downloads of my favorites hoping they get a little extra cash. They make my life so much more better.
[doublepost=1490910863][/doublepost]

My band played over 500 shows, opened for some of the biggest names imaginable for a couple of years (2007-2010). We worked day and night to songwrite, record, design, market, hussle, etc... Our live shows were killer, we got offered record deals, took a chance, quit our jobs, and really did 1000x better than our fellow Bay Area bands did, even got songs into TV, and a few major films. Despite all of our work, the money we made rarely even covered cheap motels, gas, oil changes on the van, replacement cables, and maybe eating subway once a day. Once it became obvious that there was nothing physical to sell anymore at live shows, we had to give up, for those 10-20 cd sales each night meant the difference between a motel vs. sleeping in the van. Being in a band is amazing, but streaming services are a joke to 99.9% of musicians.

This is one of the saddest posts I have ever seen. I love music. I am disappointed the artists do so poorly with so much effort - even when being big and getting into so many venues.

What genre?
Score: 4 Votes (Like | Disagree)

Top Stories

Apple Takes Legal Action Against Small Company With Pear Logo

Saturday August 8, 2020 11:09 am PDT by
Apple is taking legal action against the developers of the app "Prepear" due to its logo, according to iPhone in Canada. Prepear is an app that helps users discover recipes, plan meals, make lists, and arrange grocery deliveries. The app is a spinoff of "Super Healthy Kids," and the founders claim that they are facing litigation from Apple. Apple reportedly takes issue with Prepear's logo, ...

Kuo: Global iPhone Shipments Could Decline Up to 30% If Apple Forced to Remove WeChat From App Store [Updated x2]

Sunday August 9, 2020 10:17 pm PDT by
In a worst-case scenario, Apple's annual global iPhone shipments could decline by 25–30% if it is forced to remove WeChat from its App Stores around the world, according to a new research note from analyst Ming-Chi Kuo viewed by MacRumors. The removal could occur due to a recent executive order aiming to ban U.S. transactions with WeChat and its parent company Tencent. Kuo lays out...

Google Maps Debuts New Apple Watch App and CarPlay Features

Monday August 10, 2020 9:16 am PDT by
Google today announced the launch of several features for Google Maps on Apple products, including new CarPlay functionality and a new Google Maps app that works on Apple Watch. The new Google Maps app for Apple Watch works similarly to the iOS app, allowing Apple Watch owners to get directions for a car, bike, public transit, or on foot. The app supports estimated arrival times and...

2020 iMac Teardown Reveals Internal Changes and Similarities

Saturday August 8, 2020 12:44 pm PDT by
A teardown video, shared by OWC, reveals the internal changes in the new 2020 27-inch iMac. The 2020 27-inch iMac was announced earlier this week with 10th-generation Intel Core processors, AMD Radeon Pro 5000 series graphics, up to 128GB of RAM, up to 8TB of storage, a 1080p front-facing FaceTime camera, a True Tone display with a nano-texture glass option, higher fidelity speakers, and...

Apple Seeds iOS 14 and iPadOS 14 Public Beta 4 to Testers

Thursday August 6, 2020 10:05 am PDT by
Apple today seeded new public betas of upcoming iOS 14 and iPadOS 14 updates to its public beta testing group. Today's software releases, which Apple labels as fourth betas to keep them in line with developer betas, are actually the third betas that Apple has provided and they come two weeks after the prior beta releases. Public beta testers who have signed up for Apple's beta testing...

Apple Believes This German Cycling Path Logo Infringes on Its Own Logo

Wednesday May 1, 2019 9:51 am PDT by
Apple recently objected to the logo of a new German cycling path in an appeal filed with the German Patent and Trademark Office, according to German outlets General-Anzeiger Bonn and Westdeutscher Rundfunk. Apple reportedly takes issue with the logo's green leaf and supposed "bitten" right side, attributes the company believes are too similar to its own logo. The logo, registered with the ...

Supposed iPhone 12 Display Unit Leaks

Thursday August 6, 2020 8:13 am PDT by
An image supposedly of an iPhone 12 display unit has been shared online by leaker "Twitter user Mr. White". Compared to images of an iPhone 11 Pro display piece, this new unit has a reoriented display connector, reaching up from the bottom of the display, rather than from the left-hand side on iPhone 11 Pro. This may be due to the logic board moving to the other side of the device. A...

Foxconn Reportedly Begins Seasonal Hiring Spree for iPhone 12 Production

Monday August 10, 2020 7:03 am PDT by
Apple's largest manufacturing partner Foxconn has begun its seasonal hiring spree to assist with iPhone 12 production, offering employees who recruit qualified applicants up to a 9,000 yuan bonus, according to Chinese media reports. As usual, Foxconn needs as many hands on deck as possible at its factory in Zhengzhou, China to assist with mass production of the upcoming iPhones. Apple is...

8 Third-Party Home Screen Widgets That You Can Try Out Now on iOS 14

Wednesday August 5, 2020 12:56 pm PDT by
One of the biggest new features of iOS 14 is Home Screen widgets, which provide information from apps at a glance. The widgets can be pinned to the Home Screen in various spots and sizes, allowing for many different layouts. When the iOS 14 beta was first released in June, widgets were limited to Apple's own apps like Calendar and Weather, but several third-party developers have begun to test ...

New 27-Inch iMac's Storage Affixed to Logic Board, 4TB and 8TB Configurations Have Expansion Connector

Friday August 7, 2020 7:46 am PDT by
Following a report from German blog iFun.de that claimed the new 27-inch iMac's flash storage is soldered to the logic board, MacRumors has obtained additional information in an internal document for Apple technicians. In the document, Apple says that the flash storage is indeed affixed to the logic board and cannot be removed. However, for the 4TB and 8TB configurations, Apple says that a...