The RIAA has released its statistics on digital and physical music sales for 2011, and it has confirmed that downloads have beat out physical for the first time, eeking just over the 50 percent mark. Total US music shipments were up for the first time since 2004, with a 3.5 percent gain to 180 million units, though that increase mostly came from digital, which had an increase of 11.3 percent year-over-year. Notably, the digital market appears to have shifted a bit towards full album downloads over singles. Album downloads increased by 22.1 percent over the year, compared to a growth of 10.9 percent for singles. The rest of the statistics offer few surprises, with CD revenue down by 8.5 percent and vinyl up by 34.2 percent — though the latter still only accounts for 2 percent of all revenue.
Subscription music services like Spotify, Rdio, and MOG gained 300,000 customers over the course of the year to a total of 1.8 million, and revenues from such services increased by 8.5 percent to an all-time-high of $241 million. The increase is likely due in no small part to the introduction of Spotify to the US last year, but, despite the increases, streaming still represents a very small portion of the market. The services pulled in about twice as much revenue as vinyl did for the entire year.
While there's no question that streaming music services resonated with consumers, we don't think the new statistics will persuade those who've already refused to offer their music on the services. Artists like Coldplay, Adele, and the Black Keys have all (at least partially) avoided the services mostly due to concerns over the low amount of royalties generated by the services, and over 200 labels pulled out over for the same reason back in November. Others like Universal Music UK and Warner Music Group, however, have defended streaming music services.
One reason why different artists and labels have varying stances on the matter is that they all have different deals with services like Spotify, Rdio, and MOG — and some make more than others. The debate made news today when Black Keys drummer Patrick Carney said in an interview that "we won't put all of our music on it until there are enough subscribers for it to make sense." He continued on to suggest that the services were taking far too large of a cut for themselves, and that after the label takes its share there just isn't enough for the artists. Whether or not that's the truth is clearly still up for debate, but if streaming services continue to pull in subscribers and money, artists may not be able to avoid joining in for much longer.