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Streaming Services Generated More Than 50% of All U.S. Music Industry Revenue in 2016

Variety logo Variety 3/30/2017 Janko Roettgers

Streaming music services were for the first time ever responsible for more than 50% of all U.S. music industry revenue in 2016, according to new numbers released by the Recording Industry Association of America (RIAA) Thursday.

Paid and ad-supported streaming together generated 51% of music revenue last year, to be precise, bringing in a total of $3.9 billion. In 2015, streaming music was responsible for 34% of the music industry’s annual revenue.

Much of that increase can be attributed to a strong growth of paid subscriptions to services like Spotify and Apple Music. Revenue from paid subscription plans more than doubled in 2016, bringing in $2.5 billion, with an average of 22.6 million U.S. consumers subscribing to streaming services last year. The year before, subscription services had an average of 10.8 million paying subscribers.

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The huge growth in paid streaming led to a big decline in paid downloads, with iTunes and other transactional digital music services bringing in 22% less money in 2016, to the tune of $1.8 billion. CD sales also continued to fall, with all physical media bringing in $1.7 billion, which is 16% below 2015 levels.

The RIAA once again used its report to lambast ad-supported streaming services for not contributing enough. RIAA chairman Cary Sherman called for a change in copyright laws to do away with safe-harbor protections for YouTube and other platforms carrying user-generated content Thursday, complaining in a blog post that the current legal framework “feels like a rigged system.”

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However, these complaints come at a time where digital music is reversing the fortunes of an industry that has seen more than a decade of revenue declines. On  a retail basis, music industry revenue grew 11.4% in 2016.

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