Streaming Is The Future Of Music Distribution...

...says Captain Obvious. It's also the present for most, according to the latest report from the Recording Institute of America (RIAA). Streaming revenue hit the $2.4 billion mark last year, up from $1.9 billion the year prior. CD sales are sliding but still strong at $1.5 billion, and vinyl sales continue to grow reaching $422 million in 2015. 1

The RIAA breaks down streaming services into three main categories; Paid Subscription (e.g. Tidal), Sound Exchange/Distributions (e.g. Sirius XM), and On-Demand Ad-Supported (e.g. YouTube, Spotify). As you can see in the opening graphic, that last category of free streaming does a miserable job at actually generating revenue for the people who create the music but apparently the business model works very well for the people who run these companies.

What does this mean for the future of music? Crystal balls are notoriously self-serving so I'll simply stick to the fact that there's more new music available today than at any other time in our music-consuming history. Of course this doesn't speak to how or even if musicians make a living at their art and craft but based on numbers alone, free streaming sucks the life out the living.

Also, having tech companies like Google and Apple acting as major players in the music business may seem like for-profit marriages of convenience but digital distribution makes for strange bedfellows.

On a personal note, I would not want to live without Tidal HiFi as it's an essential aspect of my daily music discovery and listening routine. Typically when I discover music I really enjoy and listen to repeatedly on Tidal, I'll seek out and buy the download, when available. Don't tell anyone but sometimes I'll even listen to music I own on Tidal, kind of a reverse pirating scheme, paying musicians more than once for the same album.

1 see Michael Fremer's post "30,902,000 Records Pressed in 2015---And That's With A Fraction of 'Precincts Reporting'" on for some useful data on record sales.

grawhi80's picture

Hi Michael,

I regularly do the same through my Qobuz subscription as when I'm not at my main Hifi, the convenience of streaming from services wins out.
It's far easier than having to load an iPhone with tracks.
I'm glad I'm further contributing to my favourite artists too, however small.

Jorgen Skadhauge's picture

- and another thing is that in these years there are quite often a new remastered version available (Qobuz HIFI) sounding better than the old mastered version, even version I personally ribbed with dbpoweramp to my NAS.

labjr's picture

As I've said before, downloads and now streaming have killed the music business. I don't think the numbers are anywhere near what they were when people were buying record albums and discs.

brucew268's picture

Actually, the numbers over the past 15 years are not a slam dunk against streaming but point to it more as a possible savior to the industry, with some necessary tweaking of the business model.

Music revenues:
1970's no net growth
1980's 50% growth
1991-94 44% growth
1995-1999 plateaued
2000 $14.3 billion - started declining
2005 $12.2 bllion
2010 $6.56 billion - Preciptious drop each year 2005-2010.
2015 $7.02 billion - From 2011 annual music revenues stablised even though the sources of the revenue were changing.

Some obvious dates of note, whether causes or randomn correlation:

1970's Compact cassette growth
1979 - Sony walkman
1983 - CD introduced
1990's CD's become dominant. Much old music replaced by CD's
1999 - Napster started.
2003 - iTunes store opened.
2007 - Amazon music downloads
2011 mid-year - Spotify entered US.
2013 - Itunes radio