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Streaming music revenue beat CDs in the US last year for the first time

Streaming music revenue beat CDs in the US last year for the first time

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Streaming music services accounted for more music industry revenue than CDs in the US last year, beating the dominant physical format for the first time. In total, streaming services were responsible for $1.87 billion in revenue, compared to CDs' $1.85 billion. Those streaming services include subscription options like Spotify, radio models like Pandora, as well as other platforms like YouTube and Vevo. Though it was only by a slight margin this year, the trend is clear: streaming services are moving toward the top of the industry, while CDs continue to fall. The figures were released this week by the RIAA.

"Record companies are now digital music firms."

While streaming services were able to take down CDs, they were still beaten by physical formats as a whole. Physical sales were still responsible for 32 percent of music industry revenue last year, while streaming services brought in 27 percent. Digital downloads remain bigger than both of them, at 37 percent. That figure has been dropping, however, as streaming services move in to take their place. "Record companies are now digital music firms, earning more than two-thirds of their revenues from a variety of digital formats," Cary Sherman, CEO of the RIAA, writes in a blog post discussing the figures.

The RIAA says that overall music industry revenues have remained flat for the past few years, despite how revenue sources have continued to shuffle around. CDs were replaced by digital downloads long ago, but now digital downloads are slowing, and it looks like it may not be long before streaming replaces them. While physical shipments as a whole are also shrinking, there is one area that they continued to see a bump: vinyl, which had revenues nearly double year over year.

As streaming continues to grow, the discussion around how those services pay artists will only get louder. Even the RIAA is chiming in on it. "Streaming music has been the subject of a healthy debate, which is appropriate," Sherman writes. "...But the reality is that the consumer has spoken and this is what fans want. The entire music community must come together to help make these services work for fans, artists, and the music industry." There's been no real movement toward a resolution yet, but it'll be increasingly pressing as revenue shifts farther from physical purchases and permanent downloads and toward Spotify and Pandora.