Spotify, Apple Music responsible for both rebound of music industry and dying physical med...

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Recorded music revenue jumped by double digits last year, thanks to revenue growth from Apple, Spotify and other streaming services, according to a new report from the Recording Industry Association of America (RIAA), the music industry's lobbying group




In 2017, U.S. music industry revenues jumped 16.5 percent in retail value and 12.6 percent in wholesale value, to $8.7 billion and $5.9 billion, respectively -- growth that's attributed nearly entirely by RIAA to growth in paid subscriptions to streaming services. Streaming music revenues reached $5.7 billion in 2017, compared with $4 billion in 2016 and $2.3 billion in 2015, the year Apple Music launched.

Streaming services crossed 50 percent of the industry's revenue for the first time last year.

According to the RIAA, streaming comprised of nearly two-thirds of the industry's revenue in 2017, compared with physical (17 percent) and digital downloads (15 percent.) As streaming grew, digital downloads fell 25 percent in 2017. And while physical media revenue is far off its peak, it fell just four percent last year, to $1.5 billion.




This continues a renaissance in revenue for the industry, which was battered for years by the collapse of its traditional model. In fact, 2017 marked the first time since 1999 in which U.S. music revenues grew for two years in a row.

The RIAA release did not split out the revenues or market share numbers for the different streaming services. As of earlier this month, Apple Music had reached 38 million subscribers, and the service is expected to overtake Spotify, at least in the U.S., as soon as this summer.

"Our story continues to be one of great promise, but our footing is fragile, and a sustained, durable recovery is jeopardized by a fundamentally uneven playing field," RIAA chairman and CEO Cary Sherman wrote in a Medium blog post this week, geared to the release of the numbers. He added, though, that the industry has not yet found a model for making sure artists are fairly compensated, especially in regards to the small amount of revenue that accrues to artists when their music is streamed on YouTube.

"To the fan, there is often little difference between the multitudes of services available," wrote Sherman. "Yet the payouts to creators are very different and vastly impacted by outdated or abused laws and regulations."
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Comments

  • Reply 1 of 22
    DAalsethDAalseth Posts: 102member
    I stream everything now. Oh I have a library in iTunes, but I can't remember the last time I played anything on it, at least a couple of years. And I suspect it's been at least ten years, maybe fifteen since I bought a physical CD.
    watto_cobra
  • Reply 2 of 22
    asciiascii Posts: 5,456member
    It's not just that they've switched to a payment model that's so cheap piracy isn't worth the hassle any more, it's that music itself is getting a bit of life and creativity back in to it again, there was a period there where everything was just mass produced.
    flashfan207
  • Reply 3 of 22
    SoliSoli Posts: 6,684member
    DAalseth said:
    I stream everything now. Oh I have a library in iTunes, but I can't remember the last time I played anything on it, at least a couple of years. And I suspect it's been at least ten years, maybe fifteen since I bought a physical CD.
    Last year I just said screw it and deleted my local library from iTunes. I did find that my iPhone wouldn't connect properly with no music in it after iOS 11 so I created a blank track, which did the trick. I just stream it now. I hope that Spotify comes to the Apple Watch or that Apple Music gets better for me.


    ascii said:
    It's not just that they've switched to a payment model that's so cheap piracy isn't worth the hassle any more, it's that music itself is getting a bit of life and creativity back in to it again, there was a period there where everything was just mass produced.
    How can you say that? There has always been creativity and independent artists in the music industry. You can even have talent and creativity in a cover song. Not liking a particular, popular genre has no bearing on anything else going on with all the other music in the world. Outside of languages and tech, music might be the only other human creation that evolves constantly.
    edited March 23
  • Reply 4 of 22
    foggyhillfoggyhill Posts: 4,584member
    ascii said:
    It's not just that they've switched to a payment model that's so cheap piracy isn't worth the hassle any more, it's that music itself is getting a bit of life and creativity back in to it again, there was a period there where everything was just mass produced.
    The mass produced era wasn't post 2003, more like pre 2003 when the music industry was awash in money and didn't need to work for it, so pre digital downloads.

    Right now, most bands don't make any money at all except by touring... So being in the poorhouse I suppose "inspires" creativity.
    Most of the money goes to a few artists (much less widely than before) and a few rights owners (music groups).
    numenorean
  • Reply 5 of 22
    Ironic isn’t it?!? 🤨
    repressthis
  • Reply 6 of 22
    supadav03supadav03 Posts: 327member
    Ironic isn’t it?!? 🤨
    Like rain on your wedding day or the free ride when you’ve already paid...
    repressthis
  • Reply 7 of 22
    supadav03 said:
    Ironic isn’t it?!? 🤨
    Like rain on your wedding day or the free ride when you’ve already paid...
    Exactly.
  • Reply 8 of 22
    foggyhillfoggyhill Posts: 4,584member
    It's like 10000 spoons when all you need is a knife when "there is no spoons", but if your "mind makes it real", you may get a knife anyway. (Matrix References).
  • Reply 9 of 22
    Streaming is wonderful for the streaming companies and for the few artists (and labels) actually making real money on it (and who get paid more money per stream than other artists). Everyone else has to keep their day jobs. The big advantage to streaming as I see it is in the discovery of great music from independent artists I would never have found or been able to listen to before. Once discovered, there are many ways to help support them beyond streaming (though that is at least some revenue, which is better than none), like buying their music on iTunes, going to their events, or if they have a patreon account, then becoming a patron. :) Just pondering...
  • Reply 10 of 22
    Mike WuertheleMike Wuerthele Posts: 2,336administrator
    foggyhill said:
    ascii said:
    It's not just that they've switched to a payment model that's so cheap piracy isn't worth the hassle any more, it's that music itself is getting a bit of life and creativity back in to it again, there was a period there where everything was just mass produced.
    The mass produced era wasn't post 2003, more like pre 2003 when the music industry was awash in money and didn't need to work for it, so pre digital downloads.

    Right now, most bands don't make any money at all except by touring... So being in the poorhouse I suppose "inspires" creativity.
    Most of the money goes to a few artists (much less widely than before) and a few rights owners (music groups).
    The mass produced era is variable, subject to opinion, and is generally 10 years after the end of the heyday of a preferred genre, based on my observations.
    AppleZulu
  • Reply 11 of 22
    I worked in the music industry from the mid 90s through the mid 00s and saw this transformation. We were printing money in the late 90s and within a few years it was in free fall. There's not really anything to do about it except adapt (and figure out a way to get fairer revenues from YouTube). I still buy CDs for full sound quality from certain artists that I know are particular about the sonics and have real depth to the acoustics of their recordings. And sometimes I buy a digital download of other artists so I can load their songs on my kids' phones who aren't old enough for unfettered access to Apple Music yet.

    But in both cases, I purposely stream their music from Apple Music when in my car or elsewhere so that they not only got the boost from an album purchase, but the ongoing revenue from streaming. Everyone else, I just stream if I'm interested.
    edited March 24 watto_cobra
  • Reply 12 of 22
    I subscribe to apple music and love it, but if I find an album I really like, I'll buy it on Bandcamp if I can, and if not there then on iTunes.
    watto_cobra
  • Reply 13 of 22
    mavemufcmavemufc Posts: 250member
    Crazy how easy streaming services are to use, 9.99 per month to listen to millions and millions of songs, still buy CD’s sometimes but not often.
    watto_cobra
  • Reply 14 of 22
    wozwozwozwoz Posts: 175member
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
  • Reply 15 of 22
    mac_128mac_128 Posts: 2,975member
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    Yup. Vinyl is at its highest sales in something like almost two decades. But that wouldn't be possible without the broad availability of unlimited high quality wireless connections in the US. The rest of the world is likely a different story. When I go camping, especially in a national park, it's back to the iPod era. That's still true for International travel, and air travel in general. 
    watto_cobra
  • Reply 16 of 22
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    I agree, though as the 'pipes' get better (5G, fiber), I could see services like Apple Music eventually move to full CD quality files (or better) instead of compressed 256k bitrates.  So then the distinction would just become about ownership vs greater access.
    watto_cobra
  • Reply 17 of 22
    SoliSoli Posts: 6,684member
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    I agree, though as the 'pipes' get better (5G, fiber), I could see services like Apple Music eventually move to full CD quality files (or better) instead of compressed 256k bitrates.  So then the distinction would just become about ownership vs greater access.
    I wouldn’t assume that Apple is going to go with no compression… EVER!  There was no reason when the iTunes Music Store started and there’s even less reason today.
    edited March 24
  • Reply 18 of 22
    Soli said:
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    I agree, though as the 'pipes' get better (5G, fiber), I could see services like Apple Music eventually move to full CD quality files (or better) instead of compressed 256k bitrates.  So then the distinction would just become about ownership vs greater access.
    I wouldn’t assume that Apple is going to go with no compression… EVER!  There was no reason when the iTunes Music Store started and there’s even less reason today.
    When the iTunes Music Store started, they used 128k bitrate files.  As internet speeds and drive capacity increased, they moved to 256k bitrates.  While I'm not assuming, I think the chances are decent as storage prices continue to get cheaper, and more and more people have unlimited data plans and faster internet access.
    edited March 24
  • Reply 19 of 22
    SoliSoli Posts: 6,684member
    Soli said:
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    I agree, though as the 'pipes' get better (5G, fiber), I could see services like Apple Music eventually move to full CD quality files (or better) instead of compressed 256k bitrates.  So then the distinction would just become about ownership vs greater access.
    I wouldn’t assume that Apple is going to go with no compression… EVER!  There was no reason when the iTunes Music Store started and there’s even less reason today.
    They started with 128k bitrates and have moved to 256k bitrates.  While I'm not assuming, I think the chances are decent as storage prices continue to get cheaper, and more and more people have unlimited data plans and faster internet access.
    None of that would push Apple to move to uncompressed audio. At best, you're looking at them using a lossless compression algorithm, like ALAC or whatever comes along that is better but not a potential licensing debacle.
  • Reply 20 of 22
    AppleZuluAppleZulu Posts: 242member
    wozwoz said:
    Your article headline is confused and misleading:  streaming has had almost no effect on physical media sales - physical media sales have basically stabilised for the last 2 years. What streaming IS doing is causing the death of downloads (not physical sales). The old download age is coming to an end.

    The market is shifting into two forms:

    a) The STREAMING market for those who value CONVENIENCE over quality. This is wiping out the download market. Apple doesn't even sell iPods anymore.

    b) The PHYSICAL market for those who want ownership, COLLECT, and value QUALITY (CD resolution or hi-res (e.g. SACD), and vinyl)

    While there are hi-res download formats, their sales are a trifle, they cost more than SACDs, and while it may become possible to stream in CD quality or better as a default (without requiring specialist providers), the fact is that 99% of streamed data is low-res lossy data at about 1/8th the data throughput of CD, because most of the streaming market simply does not care: the model is all about convenience.
    1. Re: the whole hi-res versus convenience thing. The mass market has always been about convenience, and the quality of what is conveniently available now is many orders of magnitude better than days of yore. An iTunes file played through AirPods is better than cassette walkmans, (in many cases better than crappy earphones that came with CD walkmans), k-mart stereo racks, mass-pressed, fingerprint covered vinyl, etc. etc. A JBL beercan Bluetooth speaker playing streamed Apple Music is vastly superior to all kinds of consumer audio products from days of yore. Is it as good as 180-gram vinyl played through a MacIntosh tube amp attached to a pair of magnaplanars? No, but that’s a ridiculous comparison. 

    1.a. There may soon be a market for uncompressed streaming audio. The technology and bandwidth are currently available, and unlike the various physical media markets, deployment could be quick and easy. Apple Music could charge an extra $5 per month for access to lossless and even surround sound mixes of whatever is out there. Existing Apple TVs connected to home Audio can deliver it. Lots of people have ATVs connected to home theater equipment that already deliver high bandwidth audio attached to video content. Such a business model wouldn’t be hobbled by the high costs and inconvenience of re-purchasing content on SACD, Blu Ray Audio, etc. These formats continually fail because they’re too niche, and too expensive. People will re-buy a few favorites in those formats, but not their whole catalog, and so sales don’t warrant continued production. Apple already delivers 4K video content without requiring that consumers re-purchasing everything. They can likewise make best available audio content an option by putting it on their servers once and flipping the switch on for consumers.

    2. Apple still sells iPods.
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