It’s over, we have officially reached the Spotify era, for the first time in the history of the music industry, streaming services have earned more money than CDs sales. According to the RIAA report, streaming earned $1.87 billion in 2014, while CD sales took in $1.85 billion. The numbers are still very close but this is a landmark and it is highly predictable that both numbers will grow further apart in the following years. We have repeated it over and over, people consume more and more streaming music and buy less and less music in physical or digital forms, and why wouldn’t they do it? Streaming is mostly free!
The number of paid subscriptions to on-demand music services grew by 26% and revenues from streaming services (free and paid versions of Spotify, Rhapsody, Pandora, SiriusXM, YouTube…) rose by 29% in 2014.
Despite all these numbers, physical formats as a whole still retained the largest part of the industry’s overall revenue (32%) whereas streaming services represented 25% and this may be due to vinyl LPs sales, which continued to grow, by 49%!
Another point is that the revenues at estimated retail value were down to $6.97 billion, but just slightly (-0.5%) compared to 2013, and the revenue of wholesale revenues were up 2% to $4.86 billion.
So the music industry is still making plenty of money except that artists won’t get very much of this $1.87 billion, but streaming is here to stay and vinyl may be a temporary solution for artists… So should they all venture into the streaming system like Jay Z who bought the Swedish streaming music service Aspiro, or even like Phish who launched their own streaming service last year?