In record label executive offices across the U.S. there’s rejoicing as the latest RIAA numbers show a double digit increase in revenue for the first time in almost 20 years. The latest figures show that the recorded music market in 2016 brought in $7.7 billion, up a bit more 11% over the previous year. And guess what? Despite what the many naysayers had predicted, the growth is all because of streaming.
Streaming contributed $3.9 billion to the total revenue in 2016, which was up 69% from the year before. And get this – it now makes up 51% of the recorded music business, which is the first time it’s crossed that mark in the U.S. There’s even more good news though. There were 431.74 billion (with a B) streams counted by Nielsen Music (which includes video and audio on-demand streams), and the average per-stream rate went up to $0.0072. To put that number in perspective, that number last year was $0.00517, and in 2014 it was $0.00666.
One of the downsides of the streaming numbers is that fact that YouTube no longer reports all of its streams to Nielsen Music. Last year it began to report streaming data on artists whose music has over 1,000 views a day. That means that a lot of the streaming data is going unreported, something that’s bound to bring about some gnashing of teeth in label board rooms.
As you would expect, CD sales are now rapidly declining to the point where just 99.4 million full-length CDs were sold in the United States. Although that was worth $1.2 billion, which is nothing to sneeze at, it still marked the first time since 1986 that fewer than 100 million were sold. Top that off with the fact that downloads were down 22% last year to $1.8 billion, and you can see that it’s a good thing that streaming has picked up the slack.
The numbers show that the vinyl fad looks like it has peaked though, as sales revenue grew just 3.5% to around $430 million, based on a 1.8% growth of unit sales to 17.2 million. To put that into perspective, vinyl growth averaged 38 percent a year from 2012 through 2015, according to Nielsen Music numbers.
So overall, the music business is now picking up steam in the right direction. Hopefully the growth trend will continue.