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Streaming music revenue surpasses digital downloads for the first time

Updated Dec 19th, 2018 9:14PM EST
Streaming Music

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Streaming music is hardly the new kid on the block, but it’s seemingly grown exponentially in the past few years thanks to services like Pandora, Spotify, and most recently, Apple Music. With 2015 now behind us, the RIAA today released its year-end sales report and highlighted how revenue from streaming music over the past year generated more revenue than digital downloads, an industry first.

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The report reads in part:

The streaming category includes revenues from subscription services (such as paid versions of Spotify, TIDAL, and Apple Music, among others), streaming radio service revenues that are distributed by SoundExchange (like Pandora, SiriusXM, and other Internet radio), and other non-subscription on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify).

For the year gone by, the streaming sites mentioned above generated $2.4 billion, accounting for 34.3% of all industry revenue. Digital downloads meanwhile, a tally which includes both digital album and singles sales, accounted for 34% of record label revenue. And pulling up the rear, physical music sales accounted for approximately 28% of industry revenue for the year gone by.

All told, the music industry enjoyed revenue of $7 billion last year, a modest 0.9% increase from 2014. As the report highlights, revenue from digital downloads and physical sales continue to trend downwards but are being offset by a corresponding increase in streaming subscriptions.

“In 2015, digital music subscription services reached new all-time highs, generating more than $1 billion in revenues for the first time, and averaging nearly 11 million paid subscriptions for the year,” RIAA CEO Cary Sherman said. “Heading into 2016, the number of subscriptions swelled even higher — more than 13 million by the end of December — holding great promise for this year.”

On a related note, Spotify earlier this week disclosed that it now has more than 30 million paid subscribers.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.