Digital music sales dropped 9% in 2014 while streaming surged 54%

Posted:
in iPod + iTunes + AppleTV edited January 2015
Apple's acquisition of streaming service Beats Music looms large over the latest music sales data, showing once again that the industry is trending away from sales of digital songs and albums.




Nielsen SoundScan this week revealed its year-end statistics for the music industry, spotlighting 54 percent growth in on-demand streams of audio and video music-related content. Total streams were up from 106 billion in 2013 to 164 billion in 2014.

The rise of streaming services comes as traditional digital album and song sales are on the decline. Sales of digital albums fell 9 percent in 2014 to 117.6 million, while songs dropped 12 percent to 1.26 billion.

Overall album sales, both physical and digital, saw a decline of 11 percent to 257 million.

In fact, the only album sales to grow in 2014 were vinyl, which surged 52 percent. With 9.2 million vinyl records sold last year, the legacy format accounted for more than 6 percent of all physical album sales.

Vinyl sales have increased year over year for the past nine consecutive years, and 2014 was the best year for vinyl since 1991, when Nielsen SoundScan first began tracking music sales.

"Digital music consumption continues its robust growth, with On-Demand streaming up 54% over last year and 164 billion song streams being played in 2014 ," says David Bakula, SVP Industry Insights, Nielsen Entertainment. "Although overall music sales are showing declines, Vinyl album sales were up 52% in 2014, shattering last year's record-setting total by more than 3 million LPs."

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Nielsen's stats only underscore the importance of Apple's acquisition of Beats Music last May, which gave the iPhone maker an entrance into the booming subscription music service market. It's expected that Apple plans to use both iTunes and Beats Music to cater to different segments of the market.

Apple is expected to push Beats Music as a native iOS app starting with an update early this year. The change would help Apple better compete against leading streaming services like Spotify, which currently has a larger number of subscribers.

It's also been suggested that Apple could retire the Beats Music brand and instead label it under the company's iTunes umbrella, bringing it in line with other first-party offerings like the iTunes Store, iTunes Radio and iTunes Match.

Before it was owned by Apple, Beats Music got off to a slow start, with just 110,000 subscribers as of March. Its performance since being acquired by Apple remains unknown.

It's also been reported that Apple hopes to boost Beats Music subscriptions by cutting the price to just $5 per month. Apple is said to have pitched a proposal to music labels suggesting that a lower price point could grow music subscriptions considerably.

Currently, a subscription to Beats Music costs $9.99 per month, but if users are willing to sign up for a full year, it costs $99.99 for 12 months.
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Comments

  • Reply 1 of 68
    radarthekatradarthekat Posts: 3,132moderator
    It's been my contention since we heard about the Beats deal and it's still my contention that Apple didnt buy Beats so much as a way to get deeper into the world of streaming as it did to add another high-margin hardware product line. Apple has known for YEARS that streaming is not and likely never will be a big money maker. The economics just aren't there and never have been. So Apple thinks... who cares where you get your music? If downloads are going away, well we're darn sure going to milk them until they do, even if that means people will think we're behind the times. It's about profit and we're the ones making it! And so we're going to focus our energies on all the hardware used to play music. That means, iPhones replacing iPods, high-end earbuds and headphones replacing those free earbuds you get with your device, and maybe Bluetooth speakers, etc. That's where we're going to want to be and the Beats deal helps enormously to make that possible. Streaming? That's in the mix so that we can evolve sources of music that are exclusive to iPhones, etc, so we can sell more hardware to those who prefer music from the sources we provide.

    You just have to think in terms of the expansion of market potential that exists when a huge company with global distribution buys a small company that hasn't yet fully built out global distribution for its very popular products. It's a multiplying effect and that's what Apple is doing with the Beats hardware; the key component of why Apple wanted to own Beats.

    This article seems to suggest Apple sees iTunes Radio and Beats as a way to replace its declining download sales. But that just makes no sense. You see low-profit (or no-profit) streaming killing profitable downloads, so you decide to compete to get market share in the low/no profit streaming business? Makes no sense. No, you step back and say, if delivery of music is evolving from a nicely profitable model to a barely profitable model, maybe we need to think of some other means of making money from music, and that quickly leads you to all the types of hardware used to receive and play music. So that's where Apple is going.
  • Reply 2 of 68
    philboogiephilboogie Posts: 7,458member
    The increase in streaming and decline in purchasing doesn't surprise me. What is interesting, to me, is the increase in sales of vynil. I wonder if people are buying the [URL=http://en.wikipedia.org/wiki/Gramophone_record#Vinyl_quality]180-220 grams[/URL] en masse(?)
  • Reply 3 of 68
    magman1979magman1979 Posts: 1,139member
    Perhaps I'm old-school when it comes to music, but I refuse to have anything to do with streaming... I want to OWN the music I have, and have complete control over my library.

    I've purchased quite a bit of content from iTunes, the rest I've ripped into iTunes from my CD library, and subscribed to iTunes Match so I can enjoy the benefits of on-demand if needed on my iOS devices, and it has worked out very well for me.

    I keep backups of all my purchased iTunes content (which is all DRM-free), so even if it disappears from iTunes, I'll always retain my copy. The quality of the AAC files is sufficient for my needs / taste.

    These people using on-demand streaming services are part of a growing trend (IMHO) of the "I want it now, I refuse to wait for, or work towards, anything" generation that needs instant gratification in all things, and it's quite disheartening...

    :no:
  • Reply 4 of 68
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by MagMan1979 View Post

     



    “Something something, fuddy-duddy; something something, turning your back on “progress”…”

     

    Oh, don’t mind me, just getting ahead of the replies.

  • Reply 5 of 68
    philboogiephilboogie Posts: 7,458member
    [I][U][I][B]How Much Do Music Artists Earn Online?[/B][/I][/U][/I]

    http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/


    [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/53856/width/500/height/1000[/IMG]

    Geez, is that the largest size I can post? Way to go AI...
  • Reply 6 of 68
    paxmanpaxman Posts: 4,613member
    If you no longer listen to new music, or if any new music you ever hear is in the radio in your car, streaming is not for you. It tends to happen as we age. You probably own all the music you want by now.

    But if you listen to new music and keep up with what's happening you are probably young (we) and streaming is unquestioningly the best solution.

    As far as Apple giving up on music @RadarTheCat, I think you are totally missing the point. Music is the heart and soul. Devices and accessories serve the music. Apple may make its money from the latter but giving up on the former will not happen. They belong together.
  • Reply 7 of 68
    magman1979magman1979 Posts: 1,139member
    philboogie wrote: »
    How Much Do Music Artists Earn Online?

    http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/


    1000

    Geez, is that the largest size I can post? Way to go AI...

    I think I can make out those pink blobs...
  • Reply 8 of 68
    magman1979magman1979 Posts: 1,139member
    paxman wrote: »
    If you no longer listen to new music, or if any new music you ever hear is in the radio in your car, streaming is not for you. It tends to happen as we age. You probably own all the music you want by now.

    But if you listen to new music and keep up with what's happening you are probably young (we) and streaming is unquestioningly the best solution.

    As far as Apple giving up on music @RadarTheCat, I think you are totally missing the point. Music is the heart and soul. Devices and accessories serve the music. Apple may make its money from the latter but giving up on the former will not happen. They belong together.

    You're correct that most of today's new music is not something I'd classify as music most of the time, and the vocal's have turned more into who can screech louder than actual singing... :rolleyes:
  • Reply 9 of 68
    MacProMacPro Posts: 18,368member
    magman1979 wrote: »
    Perhaps I'm old-school when it comes to music, but I refuse to have anything to do with streaming... I want to OWN the music I have, and have complete control over my library.

    I've purchased quite a bit of content from iTunes, the rest I've ripped into iTunes from my CD library, and subscribed to iTunes Match so I can enjoy the benefits of on-demand if needed on my iOS devices, and it has worked out very well for me.

    I keep backups of all my purchased iTunes content (which is all DRM-free), so even if it disappears from iTunes, I'll always retain my copy. The quality of the AAC files is sufficient for my needs / taste.

    These people using on-demand streaming services are part of a growing trend (IMHO) of the "I want it now, I refuse to wait for, or work towards, anything" generation that needs instant gratification in all things, and it's quite disheartening...

    :no:

    I do own the music I stream, my own iTunes Match collection ... to any device, we as a family own, anywhere there is WiFi.
  • Reply 10 of 68
    magman1979magman1979 Posts: 1,139member
    I do own the music I stream, my own iTunes Match collection ... to any device, we as a family own, anywhere there is WiFi.

    That's the way I do it as well, find it works awesome!
  • Reply 11 of 68
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by PhilBoogie View Post

    Geez, is that the largest size I can post? Way to go AI...

     

    The three presets for image upload size are the stupidest thing about Huddler.

     

    You can force it to be the right size, though. Upload as normal, get it in your post, and then hit “Source” in the top left. You’ll see:

     

    <a href="http://forums.appleinsider.com/content/type/61/id/53856/"><img alt="" data-id="53856" data-type="61" src="http://forums.appleinsider.com/content/type/61/id/53856/width/500/height/1000" /></a>

     

    Change the numbers to the real dimensions of the image and it will post correctly.

     

    Example:

     

  • Reply 12 of 68
    Quote:

    Originally Posted by MagMan1979 View Post



    You're correct that most of today's new music is not something I'd classify as music most of the time, and the vocal's have turned more into who can screech louder than actual singing... image

     

    I'm waiting patiently for the auto-tune fad to run its course.  As well as "music" consisting of generic phrase snippets, assembled like so many Tinker-Toys, by creatively-bankrupt studio hacks.

  • Reply 13 of 68

    I'd like to a see a comparison that more accurately reflects the way I use these services. I buy music that I love, but use Spotify in lieu of the radio, to hear new things outside of my library. I think if you compared radio listens to music purchases at any time in the history of radio, you would get a similarly dramatic comparison. I think the numbers coming out of Spotify confirm that few people are using it in a "deliberate' way, choosing every song that they want to hear (if they were, the per-listen payments would be much higher, given the way they calculate the money distributed to record labels), so a better comparison is probably radio to online service. In other words, if a radio station plays a song once, and there are 20, 000 people listening, how much money does the artist make from those 20,000 listens? Pennies at best, I think--the owner of the publishing rights gets a little something, nobody else gets anything.

     

    I know it's not a perfect comparison, but it may be a better one than the purchase-to-streaming one people are usually making.

     

    Also, I think it's important to note that musicians are rarely making the bulk of their money from album sales, but the online services can help musicians gain exposure, which helps them make more money all of the other ways, like playing shows and getting their music into movies, TV shows, etc.

  • Reply 14 of 68
    paxmanpaxman Posts: 4,613member
    magman1979 wrote: »
    You're correct that most of today's new music is not something I'd classify as music most of the time, and the vocal's have turned more into who can screech louder than actual singing... :rolleyes:
    Did I say that? There is plenty good new music out there but it is hard to find. Let me correct that - it is hard to find the TIME to discover it. And perhaps equally hard to find the motivation. My mother used to be of the same opinion as you re new music. She just didn't get it. I don't know how old you are but I suspect you are over 40, if not 50. (Am I right? :) don't get me wrong, there is plenty of crap music out there but as I remember it it was always so.
  • Reply 15 of 68
    dasanman69dasanman69 Posts: 12,985member
    philboogie wrote: »

    Geez, is that the largest size I can post? Way to go AI...

    Saturn is missing its rings, and Jupiter's missing that big storm thingy. ;)

    Edit: thanks for leaving out Uranus :lol:
  • Reply 16 of 68
    freerangefreerange Posts: 1,589member
    The income graphic above is the perfect example of why streaming isn't just a horrible business model, but just plain stupid. The artists are getting totally fk'd... The music industry is shooting itself in the head and can't possibly thrive in any qualitative way when artists can't survive.
  • Reply 17 of 68
    magman1979magman1979 Posts: 1,139member
    paxman wrote: »
    Did I say that? There is plenty good new music out there but it is hard to find. Let me correct that - it is hard to find the TIME to discover it. And perhaps equally hard to find the motivation. My mother used to be of the same opinion as you re new music. She just didn't get it. I don't know how old you are but I suspect you are over 40, if not 50. (Am I right? :) don't get me wrong, there is plenty of crap music out there but as I remember it it was always so.
    I wish I was in the 40-50's range, that means less time on this hell hole LOL! I'm in my mid-30's right now, on my way to mid-life crisis! WOO HOO!

    Yeah, there is still some good music out there, but if one listen's to mainstream radio or streaming stations, it's a sad state :(
  • Reply 18 of 68
    magman1979magman1979 Posts: 1,139member
    The three presets for image upload size are the stupidest thing about Huddler.

    You can force it to be the right size, though. Upload as normal, get it in your post, and then hit “Source” in the top left. You’ll see:

    <a href="http://forums.appleinsider.com/content/type/61/id/53856/"><img alt="" data-id="53856" data-type="61" src="http://forums.appleinsider.com/content/type/61/id/53856/width/500/height/1000" /></a>

    Change the numbers to be what you want.

    Example:
    Holy freaking crap, I knew artists didn't get much out of an album or individual track sale on the likes of iTunes, but seeing the figures for streaming, iTunes is a gold mine compared to the scrap metal you get with streaming!

    Why in the hell would artists go along with this???
  • Reply 19 of 68
    singularitysingularity Posts: 1,329member
    magman1979 wrote: »
    The three presets for image upload size are the stupidest thing about Huddler.

    You can force it to be the right size, though. Upload as normal, get it in your post, and then hit “Source” in the top left. You’ll see:

    <a href="http://forums.appleinsider.com/content/type/61/id/53856/"><img alt="" data-id="53856" data-type="61" src="http://forums.appleinsider.com/content/type/61/id/53856/width/500/height/1000" /></a>

    Change the numbers to be what you want.

    Example:
    Holy freaking crap, I knew artists didn't get much out of an album or individual track sale on the likes of iTunes, but seeing the figures for streaming, iTunes is a gold mine compared to the scrap metal you get with streaming!

    Why in the hell would artists go along with this???
    Because the record labels are screwing them far worse than any streaming site is.
  • Reply 20 of 68
    philboogiephilboogie Posts: 7,458member
    The three presets for image upload size are the stupidest thing about Huddler.

    I'd be okay with that if that was the only thing. Alas...
    You can force it to be the right size, though. Upload as normal, get it in your post, and then hit “Source” in the top left. You’ll see:

    Change the numbers to be what you want.

    I only see that when replying to some posters. I myself use the BB Editor and don't get html.

    magman1979 wrote: »
    Holy freaking crap, I knew artists didn't get much out of an album or individual track sale on the likes of iTunes, but seeing the figures for streaming, iTunes is a gold mine compared to the scrap metal you get with streaming!

    Why in the hell would artists go along with this???

    Because the like being played¿
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