U.S. Music Industry Revenue Grew 11% in 2016 Thanks to Streaming Music Services

[thekeyring]

Look at that graph about who pays artists more! This is yet more evidence that the executive team isn't solely profit focused and milking 'Steve's Apple' as some try and claim.
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I still don't understand how "ownership" got so devalued, at least with music and software.

For me at least it's because there isn't that much music I like and stay liking forever.

So I'd much rather pay the cost of an album to listen to all I want every month, and delete the music I no longer care for.

If I stopped streaming would I buy all the music in my library? No. I would buy maybe half of it. But if I wrote down which songs, then did the same thing a year later, the two lists wouldn't match - my music tastes are too erratic.

The tl;dr is: it's like on demand radio. I totally respect people who want to buy and own all their music, too.

 

[BGarza]

Half the income comes from streaming now? Wow.

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.
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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.

What genre?

It's definitely a labor of love, and my band (Scissors For Lefty) still really enjoys writing songs and playing the occasional local show. Our genre falls within Indie Rock/Alternative. I don't let the industry downturn get me down, we had a tremendous run, and I'll be the first to acknowledge how convenient it is to have such easy access to music these days.

I think the new model of touring needs to be approached more like a flower pedal. 1 hour north, 1 hour west, 1 hour southeast, etc... If a band does that, they can return home and sleep in their own beds after the show, yet still reach a decent sized audience without the costs of lodging. Blasting across the country is what labels want bands to do, but that model can really put a band in the poor-house. Unless, of course, the band is super sexy. We once played with this band that setup a kissing booth every night, and they raked it in

 

[elmaco]

The technology to stream has been around forever. We could been where we are today 15 years ago, but the record labels refused to change how music is packaged. Most people don't mind paying, but they want it to be use to use.

We have the same problem in the film industry.

Why can't I stream movies like I can stream music? Why must I travel to another location m if I want to see a movie when it is released? The easiest way to see movies today is to get pirated copy.

 

[Carnegie]

Look at that graph about who pays artists more! This is yet more evidence that the executive team isn't solely profit focused and milking 'Steve's Apple' as some try and claim.

How much Apple Pays to rights-holders per streamed song is a function of how many songs Apple Pay subscribers stream. There's a pool of money that goes to rights-holders. The size of that pool depends on how much revenue Apple gets from Apple Pay subscriptions. In the U.S., about 70% of that revenue goes to the rights-holders' pool. That money is then split among rights-holders based on, among other things, how many songs are streamed.

So, if there's $1 billion in revenue (after Apple keeps its share) and 100 billion streams, Apple effectively pays out $0.01 per stream. If twice as many songs are streamed, the per-stream rate is half as much. Apple isn't paying an agreed-upon rate per stream, nor is it paying the statutory rate that some other services - e.g., non-interactive streaming services - are paying.

In Spotify's case, the reported per-stream rate is a blend of rates from different rate models, to include one similar to the one I just described.

 

[newyorkone]

Google (AKA Alphabet - a BS moniker to make it seem like they are innocent and good), cheating the system. Just business as usual for them...

Anyone supporting Youtube Red is backstabbing artists and funding the oversized blood sucking leech that is Alphabet that feeds off of other people's intellectual property, and privacy.

 

[Sill]

Google (AKA Alphabet - a BS moniker to make it seem like they are innocent and good), cheating the system. Just business as usual for them...

Anyone supporting Youtube Red is backstabbing artists and funding the oversized blood sucking leech that is Alphabet that feeds off of other people's intellectual property, and privacy.

While I appreciate your dislike for Google and I'm glad to see one more person who sees through them, please accept a slight correction on your idea of where the name came from. It wasn't intended to make people think they were innocent, it was simply wordplay to inform the public that they were into everything under the sun. "Alphabet" actually translates to "from A to Z". As in "forget everyone else, we have you covered on anything you want".

Other than that, carry on.

 

[logicstudiouser]

I really don't like the direction the music industry is going.

 

[williamyun7]

Apple can give more payments because their business is not the Music Stream Service Provider meaning they can make so much profits by selling others. Others, however, like Spotify, is a company which makes profits by providing the Music Stream Service only meaning they try to get more portions from the profits.

 

[BvizioN]

Seems yo forgot to take into account your monthly Data/internet plan.

I personally don't have to take that into account at all. I use Spotify, I create playlists with songs I like and toggle off line listening while I am at my home using broadband or any other wifi connection. Bang, they are downloaded and no need to use any data. Plus, with 20GB data a month from my network provider and the increased number of public wifi I rarely use half of it every month. And I never got the data monthly allowance with spotify in my mind. So that is zero issue for me.

 

[McCool71]

Streaming is getting there. One must remember that the number of people subscribing to streaming services is still just a small part of what used to be the total record buying public back in the so-called 'golden days' for the music industry.

On the other hand; people have so much more to spend their 'entertainment money' on these days, so the music industry will never get back to where they were. Complaining about not making what they did 20+ years ago is just silly.

Comparing what they made in the 80s (with no cell phone subscriptions or phones to buy, no Netflix or internet to pay for or apps to buy) to today is indeed apples and oranges. Even if music for some odd reason still was only available in physical form (and the rest of the world had moved on) the sales would likely have been way way lower today than it used to be. For a lot of people - especially the younger ones, traditionally one of the pillars of music spending - music is not as important anymore.

 

[BvizioN]

The Music artist get nothing for working hard.

Yeah, right. That's why they are multy millionaires, because they don't get paid a penny.

 

[Ledgem]

^ Exactly that. That is the core issue. F*** spotify for operating at a loss and setting the $10 precedent just to greedily get a huge market share, and thus killing the music industry. Albums used to sell at $10. Unlimited streaming at $20 or $30 would be okay for the industry. But with just a single $10 spread across all artists and labels and the service itself it's a joke. The ones who get most screwed are newcomer artists, who are not able to tour and earn a living that way instead.

I don't blame the steaming companies; I blame the record companies. Compensation for artists has been an issue for a long time, even back when CDs dominated and Napster was just getting started. And when technology started making new distribution methods for music possible, the recording industries started lawsuits to swat them down. You'd think they would have tried to develop their own in-house methods, but they just kept up the lawsuits seemingly in the hopes that it would all disappear and everyone would keep buying CDs.

Then the technology companies got involved. iTunes, Pandora... whether it was digital purchases or streaming, these companies built up their infrastructure and created a new monetization route for the record companies. And the record companies just complained over and over about how they were unhappy with the pricing. Steve Jobs' vision of $0.99 songs? Not enough; it all had to be $1.29 for the most popular songs (and suddenly it seemed like a lot of even barely-popular songs hit that price). Pandora also found itself with licensing issues because the record companies wanted to extract money that Pandora simply wasn't making.

And what are the record companies adding to this mix? The technology companies built the system that everyone is now using, and they're the ones working to maintain it. I can't say that the record companies are purely middlemen, but they behave that way an awful lot, and that's the way things are going.

So, Spotify? Yeah, it'd be nice if they paid a bit more. But it'd also be nice if the record companies paid their artists more, too... and if they'd stop getting in the way of the technology companies who are now acting as their storefronts and airwaves.

 

[Gubbz]

I'd really like to see a breakdown in where my money goes, who takes all the chances out of a $10 purchase whether it be CD or download.

 

[McCool71]

I really don't like the direction the music industry is going.

It is not all doom and gloom. Especially for new artists it has never been cheaper and easier to potentially reach millions of listeners. For less than 50 bucks a year there are services that lets you spread your music to all major streaming platforms without taking a cut of the profits.

If you are lucky enough to be included on one of the bigger playlists you suddenly reach a million ears that would never ever have heard your stuff before internet and streaming. The potential for being 'discovered' is bigger than ever, but so is the competition.

It is important to remember that actually making money from music was the exception and not the rule back in the day. The vast majority of recorded music has never made a cent for neither artists nor record companies. People remember the smash hit album and 4 moderately successful ones, but not the more than 100 flops released at the same time.

 

[MacBH928]

You would think the music industry will crumble after physical sales are in the niche and pirating is easier than ever, where you have to pay up to $12 per album to listen to the 2-3 songs you wanted but nope...

its still growing...

 

[buckwheet]

Tldr: streaming music services are cheap enough and convenient enough to be better than pirating mp3s...

Exactly. The point here, imho, is that while punishing people for pirating has done absolutely nothing to save the music industry, giving listeners a viable option has. People can still buy high-quality downloads on a per-album basis, and I'm sure that option will always exist. But Apple Music, for me at least, has been a brilliant option for 90% of my music listening. The other 10% comes from direct purchase/download.

 

[zephonic]

In other news:

Artists still only get <5% of the profits...

 

[wigby]

I still don't understand how "ownership" got so devalued, at least with music and software.

because they're not psychical. it's already begun to happen with film and tv too. soon cars and hopefully everything else material will follow. i just hope people are smart enough to do the math before subscribing to every service available and having nothing to show for it when it ends.
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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.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.

Article Link: U.S. Music Industry Revenue Grew 11% in 2016 Thanks to Streaming Music Services

I'm not sure why these stats and charts aren't used directly in marketing campaigns for Apple. Everyone wants artists to get more for their work. This clearly shows that Apple pays much more so millions of streaming music subscribers on the fence would likely go over to Apple's side if this were publicized more.

 

[Cigsm]

You worked for a year doing something only to make $3,000?? Wow. Sounds like you really did get screwed.

Meanwhile, artists write and record for upwards of two years. Booking studio time, hiring producers, engineers, paying to have the record mastered. Paying for a music video to promote it. If you wrote these songs with someone else they share a cut of that too.

So, who cares how much royalties they make? When a business like Spotifys whole business model is to allow you to have other people's work any moment you want anywhere in the world, you should care that those people are able to create new work by having them be paid appropriately. When your song has been played tens of millions of times from one company alone and you get $3,000 that's a major problem.

It's still royalties dude. Someone is getting paid and I bet my ass the artist is getting paid. So what difference does it make how much they get paid? If they have a problem, find a new ****ing job. The artist makes more in royalties than I did in the Navy and these ******* have the gaul to complain? Cry me a ****ing river.

 

[Cigsm]

E1 enlisted pay gives $1600 a month plus free healthcare and college. So enlisted people make more. Not that that has anything to do with what we're talking about. Good talk.

Try E1 enlisted pay in the military. Wanna tell me who makes more? Keep crying me a river.

 

[ronwasserman]

Artists don't get paid? What's the difference between streaming over a cellular network versus streaming over the AM/FM frequencies? Both are streaming. So anyone who says artists don't get paid is full of ****. They get royalties.

AM/FM radio 'plays' pay a significantly higher royalty rate than streaming. For Example, a single that would play 100k times in the US on FM radio could generate around 20k. With streaming, you'd need about 200 million plays to get that same result.

 

[JMacHack]

Look at that graph about who pays artists more! This is yet more evidence that the executive team isn't solely profit focused and milking 'Steve's Apple' as some try and claim.

Tim was a friend of Steve. Tim Cook isn't a monster, and honestly if a friend of mine left his business in my hands, I would do anything to keep my friends spirit alive in that business.

 

[Cigsm]

Actually, Spotify has yet to turn $1 in profit. Which just goes to prove how unsustainable $10 all you can eat music streaming is.

Apple can give more payments because their business is not the Music Stream Service Provider meaning they can make so much profits by selling others. Others, however, like Spotify, is a company which makes profits by providing the Music Stream Service only meaning they try to get more portions from the profits.

 

[Cigsm]

If you only like 3 songs why would you buy the whole album? Seems it would be much smarter to buy the 3 songs yo want.

You would think the music industry will crumble after physical sales are in the niche and pirating is easier than ever, where you have to pay up to $12 per album to listen to the 2-3 songs you wanted but nope...

its still growing...

 

[Cigsm]

So then you're woefully misinformed. Less then 1/4 of 1% of recording artists are millionaires based on their royalties. Most artists make the bulk of their money through sponsorships and touring.

Yeah, right. That's why they are multy millionaires, because they don't get paid a penny.