RIAA Reports Streaming Service Revenues Brng in More Cash than CD Sales for First Time Ever; Digital Downloads Still Dominant
Music trends are often not as dramatic as we make them out to be. For example, the resurgence in vinyl still only accounts for 2 percent of all album sales...not exactly as earthshaking as coverage might suggest. Up until this point, streaming has somewhat been in the same boat, but a new report from the Recording Industry Association of America shows that during 2014, for the first time ever, revenues brought in from streaming accounted for more than the sales of CDs. Streaming services brought in $1.87 billion during 2014, compared to $1.85 billion for compact discs.
The announcement isn't all that surprising for those who have tracked the respective growth and decline of the various formats. Streaming is a relatively new player to the game but it's revenues have grown dramatically over the last few years, including a huge 29 percent jump just last year.
Oddly, however, physical format albums still represent 32 percent of the overall music industry pie, compared to just 27 percent held by streaming. Consequence of Sound suggests that the $315 million brought in by vinyl made up for the drop in CD sales, but that doesn't seem to make sense...if CDs made up 27 percent of the music industry's revenues, adding the aforementioned 2 percent to that doesn't equal 32 percent*.
Digital downloads is still the format of choice however, bringing in 37 percent of revenues, although streaming is certainly catching up. Synchronization brought in 3 percent of revenues while ringtones brought in the last 1 percent.
* = further research demonstrates that the RIAA's estimates last year, that stated vinyl made up 2 percent of all industry revenues, were wildly off. The new report suggests that they were in fact responsible for 4.5 percent of industry revenues.