Streaming becomes the biggest earner in US recorded music
After years of decline, the recording industry has seen a ray of hope as streaming brings the fastest growth taking 51 per cent of the market
For the first time, streaming accounted for most recorded music revenue in the US last year, bringing the industry its fastest growth in nearly 20 years, latest figures showed.
While the breakneck expansion is welcome news for a beleaguered music industry, overall revenue is still half what it was in the late 1990s before the revolution in online music.
The Recording Industry Association of America said that overall revenue rose by 11.4 per cent in 2016 from the prior year to US$7.7 billion, the heftiest annual gain since 1998.
The money from paid subscriptions to streaming services such as Spotify, Apple Music and Tidal more than doubled in the last year alone, the industry body said.
Streaming accounted for 51 per cent of the music industry’s revenue in 2016, up from just nine per cent in 2011, it said.
Streaming options have been rising for consumers, with Apple entering the market in 2015 and online retail giant Amazon recently launching a service.
The trends in the US, the world’s largest music market, show a sharp escalation of global trends in recent years.
The International Federation of the Phonographic Industry, the London-based global body, similarly reported historic growth in 2015. It is set to release global figures from 2016 in the coming weeks.
But streaming – which allows users to select any song online – has led to casualties among other formats, which have historically been bigger moneymakers for artists.
US revenue from digital downloads on platforms such as iTunes fell 22 per cent last year and CD sales dropped by a similar 21 per cent.
One exception was vinyl, which has experienced a regrowth thanks to interest among serious collectors. But it was up only by four per cent.
Major record labels have hailed streaming as a new way to boost the industry after years of struggle starting with the craze of illegal downloading in the 1990s.
But some artists complain that they earn little from streaming, with a sliver of the revenue heading back to musicians even if they now enjoy a welcome new outlet for exposure.
Cary Sherman, chairman and chief executive of the US recording association, praised the 2016 uptick, but was cautious about the future, noting that the expansion came after years of decline.
“As excited as we are about our growth in 2016, our recovery is fragile and fraught with risk,” he wrote in a blog post.
“The marketplace is still evolving, and we’ve experienced unexpected turns too many times before.”
With CDs and downloads in freefall, “much rides on a streaming market that must fairly recognise the enormous value of music,” he wrote.