Less than two decades after Napster and peer-to-peer music streaming really took hold and changed how we purchase and listen, streaming has already passed sales as the bigger driver of revenue in the music industry, according to The Hollywood Reporter.
“Unsurprisingly, streaming is pulling the business back to health, as revenue grew 68.5 percent to $3.93 billion, up from $2.33 billion in 2015. In fact, streaming grew so much last year, that it now accounts for more revenue than downloads, CDs and vinyl combined. Together, these formats brought in $3.51 billion. Paid music subscriptions doubled in the U.S., according to the RIAA — up to 22.6 million, from 10.8 million in 2015.”
Streaming has also been good for the music industry as a whole. Music revenue was up 11.4 percent in 2016—the first time since 1998 that the industry saw a double-digit percentage increase in sales revenue.
The good news for artists and for fans is that after decades of fighting about the best fair way to enjoy music, the market seems to have found a good equilibrium. The market has found a way to keep people from downloading music for free, while being fair to both consumers and artists. Musicians even made a bit more in royalties from streaming, with rates per stream increasing from $0.00666 in 2014 to $0.0072 last year.
At a time when the digital age has caused a number of different industries—TV and movies in particular—to experience major disruption, the music industry is a good example of how those industries can make it through the changes. It’s not always an easy transition, and this one took a long time to yield benefits, but it can work out in the end.
