September 26, 2014
According to the Recording Industry Association of America, less than $3.2 billion in music sales was recorded for the first half of 2014, a 4.9 percent drop from the same period last year. While the growth of online streaming services continues to generate revenue for artists and record companies, it may not be enough to offset the reduction in sales of CDs and downloads. While downloads and streaming together totaled $2.2 billion (a similar total to last year), downloads dropped by 9 percent.
“Digital sales of all kinds now make up about 68 percent of total sales revenue for the recorded music industry,” reports The New York Times. “Streaming outlets, which include ‘on-demand’ services like Spotify, Rhapsody and Google Play Music All Access; Internet radio like Pandora and iHeartRadio; and even video services that use music, are now 27 percent of the whole.”
“Among physical formats, CD sales continue to plunge while vinyl records grow into a surprisingly robust niche,” explains NYT. “Sales of albums on CD fell 19 percent by revenue to $716 million, while LP sales grew 43 percent to $146 million.”
Download sales experienced an upswing after the Apple iTunes store was introduced in 2003, but sales began to decline a few years ago, followed by a significant drop in 2013.
Many have pointed to streaming services that charge for access or offer free music in exchange for listening to ads. The shift toward streaming has led to significant tech deals recently including Apple’s acquisition of Beats, Google’s purchase of playlist service Songza, and the launch of Amazon’s Prime Music service.
Apple Plans to Shut Down Beats Music, TechCrunch, 9/22/14
Apple’s Beats Music Brand May Go Away. Apple’s Beats Music Service is Sticking Around, Re/code, 9/22/14