Through the first half of the year, retail spending on recorded music rose by 8.1% to $3.4 billion, according to fresh findings from The Recording Industry Association of America. At wholesale, value increased 5.7% to $2.4 billion.
“Streaming in all its forms accounted for almost half of all recorded music revenues in the first half of 2016,” Cary Sherman, Chairman and CEO of the RIAA, notes in a new blog post. “This represents a remarkable transformation and reinvention by a business that was principally physical products just six years ago.”
Over the first half of the year, there were an average of more than 18 million music subscriptions -- doubling the 9 million reported at the same time last year.
As such, music subscriptions have become significantly larger revenue generators than CD sales, and virtually equal to permanent downloads.
Revenues from streaming services continued to grow strongly both in dollars and share of total revenues. During the first half of the year, streaming music revenues totaled $1.6 billion -- up 57% year-over-year. This accounted for 47% of industry revenues, which compares positively with 32% in the first half of 2015.
This category includes revenues from subscription services, such as Apple Music, TIDAL and paid versions of Spotify, streaming radio service revenues that are distributed by SoundExchange, like Pandora, SiriusXM, and other Internet radio, and other non-subscription on-demand streaming services, such as YouTube, Vevo, and ad-supported Spotify.
Paid subscriptions experienced massive growth in the first half of the year. The entrance of new services like Apple Music and Tidal -- along with growth from services like Spotify Premium -- helped both revenues and the number of paid subscriptions more than double versus the prior year.
First half revenues from subscription music streaming services surpassed $1 billion for the first time, growing 112% to $1.01 billion.
Even with these impressive figures, all is not well with the music industry.
“Despite the massive consumer demand for music, the damning reality remains that music is fundamentally undervalued, with broken, outdated laws threatening the entire music community and distorting the marketplace,” according to Sherman.
Sherman takes particular issue with Google, and its YouTube unit, which he feels doesn’t sufficiently reward artists and their labels.
“All ad-supported, on-demand revenue streams, both audio and video, collectively generated revenues of only $195 million in the first half of 2016 -- just 6% of the year’s entire music market revenue,” per Sherman.
Going forward, he is confident that policymakers in the U.S. and abroad will reconsider what he believes to be “broken copyright and licensing systems.”