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
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
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.
And here I was hoping the MAFIAA would be dismantled soon enough with the new ability to self-publish. Guess I was wrong.
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] 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.