New | US music industry seeing revival from streaming revenue

After almost two decades of relentless decline caused by piracy and falling prices, the music business is enjoying a fragile recovery thanks to the growth of paid streaming services like Spotify and Apple Music.

The US industry is on pace to expand for the second straight year -- the first time that’s happened since CD sales peaked in 1998 and 1999. Retail spending on recorded music grew 8.1 per cent to US$3.4 billion in the first half of 2016, according to a midyear report from the Recording Industry Association of America.

The credit goes to streaming -- Internet services that give listeners commercial-free access to millions of songs for a monthly fee -- or for free if they’re willing to hear ads. US streaming revenue grew 57 per cent to $1.6 billion in the first half of 2016 and accounted for almost half of industry sales.

“It feels like the market is slowly recovering after years of being in crisis and shrinking,” said Zach Katz, the head of US operations at BMG Rights Management GmbH, a record label and music publisher whose artists have included M.I.A. and Blink 182. “It’s absolutely a step in the right direction.”

The results can be seen in the financials of music companies big and small. The three major record labels -- Vivendi SA’s Universal Music Group, Warner Music Group, owned by billionaire Len Blavatnik, and Sony Music Entertainment -- have all reported gains this year. BMG, a smaller label and publisher, reported a 4.6 per cent sales increase for the first half of the year.