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Music Industry Revenue Finally Growing Thanks to Streaming
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The music industry is on track to post back-to-back annual revenue growth for the first time since 1998-1999 thanks to the thriving online streaming business models developed by services like Spotify and Apple’s (AAPL - Free Report) Apple Music.
According to a report from the Recording Industry Association of America (RIAA) obtained by Bloomberg News, retail spending on recorded music grew 8.1% to $3.4 billion in the first half of 2016. After years of slumping revenues due to piracy and declining prices, streaming has finally helped the music business get back on track.
U.S. streaming revenue grew 57% to $1.6 billion in the first half of the year, which represents nearly half of the industry’s total sales. Paid-for subscription services are leading the growth, as more and more people are signing up for monthly streaming plans that actually make the industry some money.
Not surprisingly, music purchases continued to decline. Sales of physical music, including CDs and vinyl, fell 14% in the first two quarters, while music downloads also fell by a double digit percentage.
The source of revenues isn’t the only major industrial change that streaming has made. Artists must now consider signing exclusive release deals with the likes of Apple Music and Tidal, forcing potential customers to pick their service based on its roster of signees.
We also know that ad-supported services are struggling to convince users to switch to paid subscriptions; of Spotify’s 100 million monthly users, just over a third pay for an account. Nevertheless, exclusively paid-for services like Apple Music are growing amazingly fast. Just a year after its launch, Apple’s music service has over 17 million subscribers.
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Music Industry Revenue Finally Growing Thanks to Streaming
The music industry is on track to post back-to-back annual revenue growth for the first time since 1998-1999 thanks to the thriving online streaming business models developed by services like Spotify and Apple’s (AAPL - Free Report) Apple Music.
According to a report from the Recording Industry Association of America (RIAA) obtained by Bloomberg News, retail spending on recorded music grew 8.1% to $3.4 billion in the first half of 2016. After years of slumping revenues due to piracy and declining prices, streaming has finally helped the music business get back on track.
U.S. streaming revenue grew 57% to $1.6 billion in the first half of the year, which represents nearly half of the industry’s total sales. Paid-for subscription services are leading the growth, as more and more people are signing up for monthly streaming plans that actually make the industry some money.
Not surprisingly, music purchases continued to decline. Sales of physical music, including CDs and vinyl, fell 14% in the first two quarters, while music downloads also fell by a double digit percentage.
The source of revenues isn’t the only major industrial change that streaming has made. Artists must now consider signing exclusive release deals with the likes of Apple Music and Tidal, forcing potential customers to pick their service based on its roster of signees.
We also know that ad-supported services are struggling to convince users to switch to paid subscriptions; of Spotify’s 100 million monthly users, just over a third pay for an account. Nevertheless, exclusively paid-for services like Apple Music are growing amazingly fast. Just a year after its launch, Apple’s music service has over 17 million subscribers.
For more coverage on the state of the music industry, check out these stories: Here's Why Apple Music Is Growing Insanely Fast & Which Music Streaming Service is the Best Right Now?
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