Paid streaming services provide a big boost to the music industry

Streaming continues to play a bigger role in music industry revenue and now it’s starting to provide some real help offsetting declining album sales in the US. In its mid-year report, the Recording Industry Association of America (RIAA) reports that the industry saw its biggest growth in the first half of 2016 since the 1990s, up 8.1 percent year-over-year to $3.4 billion. In terms of music streaming as a whole, revenue from those services was up 57 percent during the first half of the year and it now makes up 47 percent of the music industry’s total revenue. That’s up from 32 percent of the total revenue this time last year.

Streaming was already the biggest money maker for the music industry in the US and now it’s starting to make a real difference in offsetting the decline of album sales. First half revenue from streaming subscriptions hit $1 billion for the first time, showing 112 percent growth. Both physical and digital downloads continue to slide (down 17 percent and 14 percent, respectively), so the streaming boon will need to continue to add customers to make up the difference.

RIAA chairman and CEO Cary Sherman took to Medium to explain that while the music industry saw some growth for the first time in more than a decade, the compensation rates from streaming services are still lower than they should be. “Despite the massive consumer demand for music, the damning reality remains that music is fundamentally undervalued,” Sherman said. “Many services rake in billions of dollars for themselves on the backs of music’s popularity but pay only relative pennies for artists and labels.”

Sherman also called on Google to do a better job taking down unauthorized material that’s posted to YouTube. The RIAA CEO said that with all or the things that have been achieved in Mountain View, surely the company can do a better job of policing unlicensed songs. Sherman noted that Congressional reform won’t be the only answer to make up the revenue gap. He explained that cooperation between the industry and the companies running streaming services could go a long way to ensure everyone is fairly compensated. The music industry needs to make the most it can out of streaming as album sales continue their decline, so fair compensation will be a hot topic for the foreseeable future.

Via: Bloomberg

Source: RIAA (PDF), RIAA (Medium)

Source: Engadget - Read the full article here

Author: Daily Tech Whip

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