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Digital music now makes more money than physical media worldwide

Engadget Engadget 12/04/2016 Billy Steele

Music streaming continues to provide a big boost to music industry revenue. In fact, digital music now outsells physical formats worldwide, nabbing 45 percent of all purchases in 2015 according to IFPI's Global Music Report. If you'll recall, the RIAA reported last March that music streaming had overtaken physical sales in the US, and the trend continued worldwide last year. Digital revenue accounted for $6.7 billion, thanks largely to a 45-percent increase in what streaming services took in. Despite industry revenue growth of 3.2 percent or $15 million for 2015, both physical sales and digital downloads declined.

While streaming services are lending a big hand to continued growth, IFPI warns that the "value gap" -- or the amount of revenue being paid out to rights holders, labels and artists -- could prove problematic. A key reason for the uneven returns is sites like YouTube that allow users to upload songs for others to listen to free of charge.

Despite YouTube shelling out $3 billion to the music industry, policing its library and launching its own ad-free streaming service, there's still concern that so-called "safe harbor" site where folks can listen for free aren't paying the same royalties as Spotify and others. In fact, IFPI says those sites only account for 4 percent of global music revenue but tout a user base that counts over 900 million. IFPI says that the discrepancy, along with the amount of revenue being returned to rights holders, could be what hinders future growth.

IFPI

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