Streaming is now the biggest form of revenue in the US music industry
Image: Tidal owner Jay Z
It has finally happened, streaming music is now officially the biggest money-maker for artists in the American music industry.
Streaming, a service that was once shunned by labels and infuriated artists such as Thom Yorke and Taylor Swift, is now accounting for 34.5% of music sales, only just edging past downloads at 34%, according to the RIAA latest year end sales report.
Whether it be a step forward or a step back, according to the RIAA, the status of streaming is far more favourable than physical sales, which were down to 28.8.%. Ad-based subscriptions pulled in 30.6% more cash than in 2014, however paid subscriptions were the leading stars, jumping to 52.3%, proving that $10.00 a month for an unlimited music library really isn’t so bad.
The streaming takeover is no surprise to major label Warner Music, last year CEO Stephen Cooper announcing streaming to be “on the trajectory to becoming our largest revenue source” in an article posted by TMN.
The same can be said for Universal Music. In 2015, Universal Music Group’s full year revenue reportshowed that streaming and subscription was the sole driver of the groups growth accounting for 52% of the groups digital recorded music revenue and 24% of total revenue in the second half of the year. Both of these were double what they have been in the first half of 2015.
While Spotify has been at the forefront of streaming in the last six years, the RIAApartly credits newcomers Apple Music and Tidal to be somewhat responsible for taking the lead over downloading. Apple Music, which launched in June 2015 and was a free service for three months, indicated from early on a positive affect on labels revenue.In six months, the service surpassed 10 million paying subscribers,showing signs its slowly winning over millenials.
It is difficult to say whether or not streaming will keep growing at the pace that it is, however, the data may be enough to help sway labels into finding a new approach in how they distribute and push music. The annualIFPI Digital Music Report will be released next month to inform us on the state of the international recording industry. TMN will find out then where the Australian industry stands on streaming.