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RIAA Says Streaming Is “Biggest Chunk” Of U.S. Music Biz

March 22, 2016 - Written By Daniel Fuller

According to year-end data from the RIAA, streaming revenue has become the largest chunk of the music industry in the United States. With just about everybody, including big names like YouTube, either already offering a subscription option or scrambling to do so in the near future, high-revenue subscription models that take relatively little capital are on the rise. Specifically, digital subscription services in 2015 made up approximately $1 billion of an industry that posted just over $4 billion in total revenue throughout the year. A turn toward digital consumption and a low barrier of entry is in progress in an industry that historically has been supported by physical sales and took luck, determination and skill in spades to enter.

Although digital music and streaming subscriptions made up about a quarter of the total revenue for the industry, revenues for ad-supported free services are still lagging behind. In total, ad-supported free streaming made up only $385 million of the total industry revenue, being beaten out by vinyl, of all formats, with $416 million in total sales. Although the net profit after the expenses of producing each medium may end up putting free streaming ahead of vinyl, whether or not that’s the case was not discussed in the RIAA’s report. The report did take tech giants to task, using that figure, among other facts, to say that music creators are being underpaid in some mediums; one example given was that AM/FM radio broadcasters didn’t have to pay royalties for the music they play.

The report, while criticizing digital music distribution to some extent, paints a rather rosy picture for the future of that particular leg of the music industry. This report comes on the heels of reports of Spotify rolling out new shows and SoundCloud preparing to introduce a subscription service. Although piracy is still the same goblin it’s always been, the surge of digital music media has made it easier than ever to find and listen to the music you want, whether you’re willing to pay for it with money or by sitting through advertisements. Streaming may not be enough to carry the industry, but it has been a welcome boost to an otherwise slowly declining market.