In case you didn’t know it already—it’s official. For years now, we have been told that online streaming would be the way forward for the survival and future of the music industry. Well folks, it’s no longer the future, it’s now the present.
In a new report, compiled by Statista, RIAA statistics show that streaming services like Spotify and Apple Music generated a massive $1.028 billion in sales for the U.S. music industry in the first half of 2014. That’s up a huge 23% from the previous year.
With all the streaming websites and apps out today, it’s hard to believe that streaming still lags behind digital downloads. Streaming is catching up fast however, and the download industry is shrinking — down 4% from the first half of last year, to $1.268 million.
Physical format sales, also known as brick and mortar products, like CDs, are continuing to diminish yearly. With revenues dropping 17% from the first half of last year, the CD is now firmly in third place behind streaming and downloads.
Streaming giant Spotify reported that it paid out one billion dollars in 2014 alone. Although the company doesn’t like to put a per-stream value on its plays, it estimates that each listen (stream) earns a payout revenue between $0.006 and $0.0084.
Now those numbers may not be mind-blowing, but when you put it in context, Beyonce’s “Drunk in Love” had more than 134 million streams. That equals between $804,000 and $1.3 million for that song alone.
Artists are understandably upset as only part of that payout goes directly to them. But here’s the catch, the growing popularity of streaming services also gives artists, new and established, a platform they’ve never had before, and lands the artist firmly at the fingertips of millions of potential fans.
Only time will tell if CDs disappear like vinyl did before it, but one thing’s for sure, streaming is here to stay.