A big jump in revenue from streaming services allowed the overall revenue of the music industry to grow 11 percent last year, to $7.7 billion in retail sales ($5.3 billion wholesale, up 9.3 percent), according to the industry group RIAA. And, for the first time, streaming services accounted for half of all digital music revenue.
On the flip side, paid downloads saw their biggest-ever decline, down 22 percent in 2016, to $1.8 billion. And, as RIAA chief Cary Sherman notes, the music business is still half of what it once was.
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. Moreover, two of the three pillars of the business — CDs and downloads — are declining rapidly. It remains to be seen whether growth of the remaining pillar will be sufficient to offset the losses from the other two. Much rides on a streaming market that must fairly recognize the enormous value of music.
Here are a couple other key other stats from the report:
- Paid subscription music was the fastest growing category, more than doubling, to $2.5 billion and accounting for roughly 1/3 of the total U.S. music industry.
- Sales of physical music — aka CDs and records — fell 16 percent, to $1.7 billion.
Correction: An earlier version incorrectly stated the retail sales and percentage growth of streaming music.