For the first time in six years, physical media like vinyl and CDs are outselling digital music downloads. The recording music industry reported that music streaming has generated more revenue than all types of media formats, but somehow music downloads landed on the last spot last year.
Surprisingly, music downloads lag behind physical media even though shipments of CDs and vinyl slipped 4 percent last year, to $1.5 billion. This is because the revenue generated by paid music downloads plunged 25% last year, to $1.3 billion.
This is mainly because users have focused more on music streaming services like YouTube, which heavily rely on ads for revenue. Music streaming was behind nearly 70% of the total revenue of the recording industry last year.
The industry acknowledged that most of the growth in 2017 was generated by streaming services. Plus, streaming services have become more diverse with Amazon offering a “limited tier service” like Prime streaming to users of its smart speaker Echo.
Music Streaming, Physical Media Outselling Digital Music Downloads
Prime streaming via Echo and Pandora Plus represented 14% of the music subscription market in 2017, according to the numbers released by the he Recording Industry Association of America (RIAA). This marks a 3 percent growth from 2016 levels.
The RIAA report also shows that the music industry is faring quite well despite criticism that the Internet is killing it. In the U.S., the recording industry’s wholesale revenues hit the $1.1 billion mark, while retail revenues stood at $2 billion in the last three years.
Digital music downloads are behind 15% of the industry’s total revenue, with CDs and vinyl being behind 17%. Even though vinyl may seem outdated, it still has many fans. The RIAA report labeled the physical media format as “a bright spot among physical formats.”
Last year, vinyl sales generated $395 million in revenue, which represents a 10% gain from previous year.
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