Streaming Music Outpaces Digital Downloads

March 26, 2016

It's a first.

According to the Recording Industry Association of America (RIAA), US streaming music revenues have officially surpassed digital downloads for 2015. From USD 1.87B in 2014, streaming music racked up a 29% rise to hit USD 2.41B in 2015.

By the streaming category, the RIAA is talking about revenues from subscription services (such as paid versions of Spotify, TIDAL, and Apple Music, among others), streaming radio service revenues that are distributed by SoundExchange (like Pandora, SiriusXM, and other Internet radio), and other non-subscription on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify).

From the chart below, you can see that streaming music (34.3%) marginally beats digital downloads at (34.0%). Marginal is the word but the trend looks favorable to the long term success of streaming music.  

According to RIAA, paid subscriptions formed the biggest and fastest growing portion of the streaming market. What is significant is that they mentioned Apple Music and TIDAL's entrance that makes this space so hot. Interestingly, market share by active users, downloads and revenue, is something quite different as Pandora and Deezer, as at Q3 2015 were champions in their respective countries of US and France, according to App Annie. What remains to be seen is the impact of the new entrants in the long run.

Is it a Big Deal?
Sure it is. Every era has a champion. Take the 1980s. The cassette was king. The 90s saw the rise of Compact Discs (CDs). Record companies thought the status quo was fantastic. A few pennies to press discs and the casing, some to the artists and the majority to expand their vast empires. Enter the 2000s and MP3s. Napster and iTunes arrived and so did the massively successful iPod. 

Now, we're in the 2010s. Spotify arrived not too long ago and finally the combined powers of the streaming music companies have toppled digital downloads. From 2011 to 2014, the revenue from streaming music experienced a 6% year-on-year increase and in the past year, we see a 7% increase. The rise of streaming music is here to stay. Make no mistake about it. 

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