Streaming Drives Music Industry Growth
The Recording Industry Association of America (RIAA) said that music streaming was the driving force behind the US music industry’s biggest growth in revenue since 1998.
Total revenue from recorded music in the US grew by 11.4% to US$7.7 billion ($10.1 billion) last year, with the RIAA reporting that music streaming platforms now account for the majority of revenue.
51.4% of revenue is generated by a combination of paid versions of music streaming services (e.g. Apple Music, Spotify Premium), streaming radio services (e.g. Pandora) and ad-supported music streaming (e.g. YouTube, Spotify.
Paid subscriptions in the US more than doubled to an average of 22.6 million for 2016, bringing in about US$2.5 billion ($3.3 billion).
Despite the positive growth, the RIAA said that the continuing decline of physical sales and digital downloads, which made up 21.8% and 24.1% of revenue respectively, meant that the true value of music must be better reflected in the revenue received from all streaming platforms.
“As excited as we are about our growth in 2016, our recovery is fragile and fraught with risk. The marketplace is still evolving, and we’ve experienced unexpected turns too many times before,” RIAA Charman and CEO Cary Sherman said in a post on Medium.
“The unfortunate reality is that we have achieved this modest success in spite of our current music licensing and copyright laws, not because of them.”
Sherman said that it makes “no sense” for music creators to receive $7 or more for 1,000 streams on services like Spotify and Apple Music, but only $1 for 1,000 streams on YouTube. He said that YouTube was using “legal loopholes” so it could pay artists and labels “well below the true value of music”.