RIAA reports streaming music sales finally beat downloads, no thanks to free loaders

woman listening to music
Almost exactly one year ago, the RIAA released data showing that in 2014 streaming services had finally surpassed CD sales, with streaming revenue at $1.87 billion compared to $1.85 billion from CDs. Digital downloads still did better than both but, looking at the trajectory, it was clear that this wouldn’t be the case for long.

Yesterday the RIAA released its data for 2015, acknowledging that the inevitable had indeed happened. “For the first time, streaming was the largest component of industry revenues, comprising 34.3% of the market, just slightly higher than digital downloads,” senior VP of strategic data analysis Joshua P. Friedlander wrote yesterday.

This wasn’t the result of explosive growth from one particular company, as the RIAA numbers show that all parts of the streaming market grew, including both subscription and ad-supported streaming. Combining all of these together, revenue grew 29 percent over last year, reaching $2.4 billion.

It was a fairly easy call that 2015 would be the year that streaming services officially passed digital downloads. In May of last year, the Warner Music Group revealed that its streaming revenue had increased by 33 percent and finally surpased digital downloads. Given the company’s status as a major label (one of three), it was fairly likely that this would hold true for the others.

Graph showing ad-supported streaming revenue compared to vinyl sales

While this is no doubt welcome news to streaming companies, it may not be to royalty rights holders, including musicians, songwriters, and publishers. RIAA Chairman and CEO Cary Sherman notes that while music consumption continues to grow, revenue for the creators isn’t keeping the same pace. “In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meager  —  far less than other kinds of music services,” Sherman wrote in a Medium post.

As proof of how disparate streaming’s popularity and revenue are, Sherman points out that vinyl sales surpassed all ad-supported streaming, generating $416 million compared to $385 million from free streaming platforms. The vast majority of revenue comes from paid, subscription-based streaming services, but as a Nielsen report recently showed, nearly 50 percent of Americans don’t see the point in paying for music streaming.

Despite this, Sherman remains confident that the future of music is promising. With that in mind, it’s anyone’s guess where we’ll be when the RIAA issues its numbers this time next year.

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