Every now and then a Gene Simmons comes along that seems to think that the music industry is going to be fine if everyone stops streaming music and starts buying CDs again. It’s obvious to just about everyone else that the genie is out of the bottle, and we’re living in a streaming world, however. That we’re living in a streaming world has just been proven by some number crunching at Billboard, which finds that in 2016, streaming revenue overtook sales and downloads as the leading revenue driver for the music business. The increase in streaming led to music sales in the U.S. being up 11.4% since 2015.
Last year, the RIAA says the industry raked in $7.65 billion in revenue, which is up from $6.87 million in 2016. Of that, streaming was responsible for $3.93 billion, which is 68.5% more than 2015. How significant is that? It’s more revenue than downloads, CD’s and vinyl sales combined. And at the end of last year, 22.6 million Americans were subscribing to a streaming service, more than double the 10.8 million that were subscribing in 2015. They also find that the amount being paid out per stream has increased, from $0.00517 to $0.0072. Granted, that’s still an extremely small amount of money, but the more people stream a track, the more money it’ll make.
This is good news for anyone in a band, especially anyone starting out. While older musicians got to see their albums come out on vinyl, then have fans buy them again on cassette and then CD, that’s obviously not happening any more. Sure, album sales aren’t anywhere near what they used to be, and pop and hip-hop will always be more popular streaming, which could be discouraging. However, you no longer need to be signed to a major label to get mass distribution. The bar for entry is low, but if you make quality music, it’ll get out there. It should also be noted that while it’s excellent that we’ve got the first double digit growth in 18 years, the $7.54 billion is about half of what the industry brought in back at it’s 1999 peak of $14.6 billion.