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

[MacRumors]

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.

Growth was driven by very strong new user adoption, as the number of paid subscriptions to full on-demand services grew 109% to average 22.6 million for the year, compared with 10.8 million in 2015. Adoption was driven by growth from both new and existing services, as it was the first full year of results for Apple Music, and other leading services like Spotify Premium grew as well.

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

 

[Chupa Chupa]

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

 

[SoN1NjA]

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

Why would I want to pay $10.99 for an album (10 songs) when I can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me

 

[Michaelgtrusa]

The Music artist get nothing for working hard.

 

[v0lume4]

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

This tells me one of two things --

People are listening to music now more than ever (I have all the songs I could ever want for $10 per month).

OR the music labels are still charging way too much in royalties.

 

[justperry]

didn't realize how ****** Spotify paid artist compared to the competition, of course they probably get more streams so it just evens out
[doublepost=1490904498][/doublepost]
Why would I want to pay $10.99 for an album (10 songs) when i can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me

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

 

[SoN1NjA]

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

download the songs! (kinda the point for paying for the membership)

Plus I have so many songs downloaded with Apple Music, Spotify, and Google Play Music, and in total they only take up 8.51GB, plus a lot of that is the same album downloaded 3 times

 

[SteveJobzniak]

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.

^ 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.

 

[Nebulance]

didn't realize how ****** Spotify paid artist compared to the competition, of course they probably get more streams so it just evens out
[doublepost=1490904498][/doublepost]
Why would I want to pay $10.99 for an album (10 songs) when i can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me

I almost bought into the concept of streaming for the reason you mention; however, I noticed that suddenly one of the artists I really wanted to hear an album from, just wasn't there anymore (this happened on Amazon Music via Prime). So I would rather buy albums by artists I like, and I will always have them, and not have to worry if suddenly an artist is pulled from one streaming service -- I'd rather not have to keep jumping service to service to keep my library populated the way I want it to be. With this in mind, buying the albums I care about still makes more sense to me.

PS: Why isn't Amazon's "Music Unlimited" included in Prime? I always found that odd.

 

[sk1wbw]

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.

 

[JosephAW]

I can hear Jack Sparrow saying: "There will be no living with her after this"

 

[djcerla]

That chart is terrifyng from an artist's standpoint.

The music industry should take a big breath and pull everything from YouTube, overnight.

As people are mainly on mobile devices, piracy would be a much lesser problem than in the 2000s and people will happily pony up for the streaming services. Nobody complains about blockbusters not being on YouTube. Things could change.

 

[Chupa Chupa]

Why would I want to pay $10.99 for an album (10 songs) when i can have 47M+ for $10
I understand you don't own the songs, but I don't want to listen to most of these songs in 5 years anyway

Plus I don't plan on canceling my membership anytime soon so they're not going away from me

Only you can answer that question for yourself.

Personally, I don't have the time to listen to 47m songs, and only a fraction of those are likely even worth a second listen or they would have more buzz. I have a nice collection going back 25 years and of course slowly growing annually with new material, though no where near the rate when I was young. Pay once never again. When I'm 50, 60, 70, still no additional cost to listen. No worries about having to keep paying ad infinitum for the privledge. And yes, still pleny of avenues to explore new music at zero cost.

And the bonus is that becaue I ripped from CD the quality is superior to anything that AM or Spotify streams -- especially important when listening at home. Also if a licensing issues errupts between a band or label and a streaming service that music goes poof. But it's still in my collection available for listening whenever I wish.

 

[itsmilo]

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.

^ 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. Streaming at $20 or $30 would be okay for the industry. But $10 spread across all artists and labels and the service itself is a joke. The ones who get most screwed are newcomer artists.

Sorry but i would never pay 30$ for a streaming service unless it offers me all recent tv shows or movie releases a day after their release. In HD of course

 

[Nebulance]

Only you can answer that question for yourself.

Personally, I don't have the time to listen to 47m songs, and only a fraction of those are likely even worth a second listen or they would have more buzz. I have a nice collection going back 25 years and of course slowly growing annually with new material, though no where near the rate when I was young. Pay once never again. When I'm 50, 60, 70, still no additional cost to listen. No worries about having to keep paying ad infinitum for the privledge. And yes, still pleny of avenues to explore new music at zero cost.

And the bonus is that becaue I ripped from CD the quality is superior to anything that AM or Spotify streams -- especially important when listening at home. Also if a licensing issues errupts between a band or label and a streaming service that music goes poof. But it's still in my collection available for listening whenever I wish.

Forgot to mention this -- I'd rather not keep paying for albums I bought years ago.

 

[SoN1NjA]

I almost bought into the concept of streaming for the reason you mention; however, I noticed that suddenly one of the artists I really wanted to hear an album from, just wasn't there anymore (this happened on Amazon Music via Prime). So I would rather buy albums by artists I like, and I will always have them, and not have to worry if suddenly an artist is pulled from one streaming service

I understand your point, however I haven't had that problem,
and being subscribed to Apple Music, Spotify, and Google Play Music one of them is bound to have it

also probably money with the Prime thing

 

[justperry]

download the songs! (kinda the point for paying for the membership)

Plus I have so many songs and with Apple Music, Spotify, and Google Play Music they only take up 8.51GB, and a lot of that is the same album downloaded 3 times

To clarify what I said, it's not $10 per month, lets say your Data plan is $50 monthly for 10 GB, half of that (5GB) is streaming from your $10 Music streaming then you actually pay $10+$25=$35.

Oh, and I read your post before you edited it, many here prefer to include the whole post instead of just the part someone wants to reply to, that's what I did and bolded the part.

 

[Nebulance]

I understand your point, however I haven't had that problem,
and being subscribed to Apple Music, Spotify, and Google Play Music one of them is bound to have it

also probably money with the Prime thing

Yeah, it's probably an issue with money for Prime. But I would've thought the idea was to put all the services into Prime (movies, music, etc), and then if someone wants just the music portion, they can get it. Oh well!

 

[SoN1NjA]

To clarify what I said, it's not $10 per month, lets say your Data plan is $50 monthly for 10 GB, half of that (5GB) is streaming from your $10 Music streaming then you actually pay $10+$25=$35.

Oh, and I read your post before you edited it, many here prefer to include the whole post instead of just the part someone wants to reply to, that's what I did and bolded the part.

About the quote part that's why I edited it out, kinda petty and dumb to mention it

as for the data part, I still don't understand, if you download the songs to your device you won't use bandwidth every time you want to listen, download them once and they're there until you remove them

 

[repoman016]

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.

^ 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. Streaming at $20 or $30 would be okay for the industry. But $10 spread across all artists and labels and the service itself is a joke. The ones who get most screwed are newcomer artists.

Maybe. For 10 bucks a month I love Spotify. I'd maybe pay 15, but 20-30 a month? no thanks. I hate to say it, but I believe you would see a lot of people go back to pirating, and how much does the artist make then?

Edit: Look at Netflix. Same thing but with movies/tv and they are under $10 a month.

 

[SoN1NjA]

Maybe. For 10 bucks a month I love Spotify. I'd maybe pay 15, but 20-30 a month? no thanks. I hate to say it, but I believe you would see a lot of people go back to pirating, and how much does the artist make then?

At $15 I'd probably have to leave Spotify unless they come out with some crazy feature to keep me

 

[SteveJobzniak]

Maybe it will become sustainable when the whole world is on the $10 plan and the artists get a larger cut of the streaming revenue.

 

[2ilent8cho]

I'm considering cancelling Apple Music and just sticking with iTunes & iTunes Match. I rarely listen to newer tracks, most of the music i listen to is the same songs i did 5/10/15/20/25/30 years ago so for me it might make sense to just buy the tracks instead of subscribing. Too much R & B music now which i cannot stand. Its been good for discovery but i can do that else where for free like youtube.

 

[smorrissey]

PHYSICAL PRODUCTS
The total value of shipments of physical products
decreased 16% to $1.7 billion. The share of the market
from physical music products fell to just 22%, down from
29% in 2015. Physical products had been more than
half the market (by value) as recently as 2010. Revenues
from CD shipments were down 21% at estimated retail
value, and made up 70% of the physical market in 2016.
Shipments of vinyl albums were up 4% to $430 million,
and comprised 26% of total physical shipments at retail
value – their highest share since

Good luck Sunrise Records you are gonna need it LOL

 

[justperry]

About the quote part that's why I edited it out, kinda petty and dumb to mention it

as for the data part, I still don't understand, if you download the songs to your device you won't use bandwidth every time you want to listen, download them once and they're there until you remove them

Ah, ok, to me streaming is just that, it streams/buffers the song each and every time you listen to a song or the same song, unlike downloading.
I thought that it wasn't possible with any of the above mentioned services, guess I am misinformed.