Streaming helps push music revenue up 8% in the first half of 2016, trade group reports
Continuing growth of music streaming led an overall revenue increase of 8.1% for the music business during the first half of 2016, with subscriptions for those streaming services topping $1 billion for the first time during the first six months of the year.
That’s the big news out of midyear revenue figures reported by the Recording Industry Assn. of America, the music industry’s trade association.
Total music industry revenue hit $3.4 billion for the first half of this year, up from $3.2 billion during the same period last year, representing “the strongest industry growth since the late 1990s,” according to the trade association.
Revenue from streaming accounted for 47% of that business, with permanent downloads constituting 31% and physical sales 20%, and the remaining 3% coming from synchronization licensing fees.
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Paid subscriptions to services such as Spotify Premium, Tidal and Apple Music more than doubled, totaling 18.3 million, compared to 9.1 million for the first half of 2015, the trade group reported. Revenue from those subscriptions accounted for more than 30% of all music industry revenues.
“The entrance of new services like Apple Music and Tidal, and growth from services like Spotify Premium, helped both revenue and the number of paid subscriptions more than double versus the prior year,” the report stated.
“The revenue growth from subscriptions alone more than offset the declines from physical sales and permanent digital downloads,” the trade group said.
Those declines include a 17% drop in revenue from permanent digital downloads to $1 billion for the first half of 2016. Similarly, revenue from sales of all physical formats also dropped 14% to $672 million during the period.
Even the recently resurgent market for vinyl LPs was down, with revenue at $207.1 million, down from $221 million in the first half of 2015.
In a separate commentary and analysis for Medium.com, Cary Sherman, chairman and chief executive of the Recording Industry Assn. of America, noted that “more than any other creative industry, the music business is leading the digital revolution, adopting and embracing new business models to serve today’s fans.”
“Music drives commerce and culture,” Sherman wrote. “It is an essential element of any major technology firm’s consumer platform.”
Sherman goes on to lobby, as the trade association has been doing in recent years, for an overhaul of the Digital Millennium Copyright Act, largely because of the disparities between how it operates for non-subscription on-demand streaming services such as YouTube versus paid services such as Spotify.
“We are on the cusp of a true music renaissance,” Sherman concluded. “The foundation is there. But we’re not there yet. Critical reforms are still needed to ensure a music ecosystem that works for both fans and creators.”
Twitter: @RandyLewis2
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