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RIAA: STREAMING DRIVES 11.4% GROWTH TO $7.7B IN 2016

Streaming overtook all other music formats in 2016, driving double-digit growth in revenue to $7.7b, according to RIAA statistics released today. That’s an 11.4% increase over 2015’s $6.87b.

It is the first time since 1998 that the industry has posted back-to-back years of double-digit growth.  

Streaming platforms such as Spotify and Apple Music generated 51.4% of all U.S. revenue ($5.77b), a dramatic spike from 2015 when streaming accounted for just over a third of income. Digital downloads were 24.1% in 2016 and physical was 21.8%.

Paid subscriptions more than doubled in the year to $2.5b, a 114% spike. The average number of paid subscriptions was 22.6m, again more than doubling the 2015 number, 10.8m.

The RIAA broke out “limited tier” services—Amazon Prime, Pandora Plus, etc.—noting that the category represented $220m of the $2.5b total.

On the downside, sales of digital tracks and albums declined faster than in any previous year. Overall, digital download revenues were down 22% to $1.8b. Individual track sales revenue was off 24%, and album revenue was down 20%.

Revenues from sales of digital albums were 49% of the download total, their highest share ever. Albums were 49% of the download pie at $876m; tracks were $907m.

Cary Sherman, Chairman & CEO, RIAA, wrote an essay criticizing the disparity between the payouts from YouTube and other services, noting “Government leaders can’t be satisfied with a dysfunctional and unsustainable status quo that devalues music.

“The unfortunate reality is that we have achieved this modest success in spite of our current music licensing and copyright laws, not because of them. That’s not the way it should be."

Sherman noted that despite his criticism of YouTube, he still very much enjoys that one video where the kitten sneezes and startles the Doberman.

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