Revenue from music streaming has overtaken downloads and physical music sales in the U.S for the first time, a new report from the Recording Industry Association of America has revealed.
Streaming revenues accounted for just over half (51%) of all U.S music industry revenue last year, which has seen an overall increase in revenue by 11.4%, though the U.S music industry is still half the size it was back in 1998.
Last year, streaming accounted for 34.4% of revenues with digital downloads accounting for 34%, and physical sales making up 28.8%.
Despite the news that services like Spotify and Apple Music are beginning to have a real impact on the music industry's prosperity, RIAA chairman Cary Sherman was cautious about the news.
“As excited as we are about our growth in 2016, our recovery is fragile and fraught with risk,” Sherman explained in a blog post.
“The marketplace is still evolving, and we’ve experienced unexpected turns too many times before. Moreover, two of the three pillars of the business — CDs and downloads — are declining rapidly. It remains to be seen whether growth of the remaining pillar will be sufficient to offset the losses from the other two. Much rides on a streaming market that must fairly recognize the enormous value of music.”
Sherman also took time to address Youtube's failure to pay artists fairly, accusing the Google-owned service of "exposing legal loopholes" to pay substantially less than other streaming services.
“It makes no sense that it takes a thousand on-demand streams of a song for creators to earn $1 on YouTube, while services like Apple and Spotify pay creators $7 or more for those same streams,” he said.
“It may be the same song requested by the user, on the same device, but the payouts differ enormously because of an unfair and out-of-date legal regime.
“A year of growth in the U.S. music business is welcome news. It suggests that years of patiently nurturing a nascent streaming marketplace has begun to pay off. But it does not erase 15 years of declines, or continuing uncertainty about the future.”
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