Streaming Music Surges As Paid Downloads Continue Downward Trajectory

The music industry has a history of fighting advances in technology, and rather than continue to do that, organizations like the RIAA and music labels in general would do well to pay attention to market trends and figure out ways to capitalize on them. Right now, the trend is towards streaming music -- downloaded album and song sales dropped sharply in 2014, while streaming services like Spotify are on the rise, according to data compiled by Nielsen SoundScan.

Full album download sales declined 9 percent to 257 million albums in 2014, while individual song downloads dropped 12 percent to 106.5 million in the same time period. Interestingly enough, it's not just streaming that's picking up the slack, but also vinyl records. The old school format saw 9.2 million sales in 2014, a 52 percent bump from the year prior and the highest they've ever been since SoundScan began tracking sales in 1991.

Google Play Music

However, music listeners are by and large flocking to streaming services, use of which skyrocketed to 164 billion songs last year. That represents a 54 percent increase from the 106 billion songs that were streamed a year prior.

The problem music labels and some artists have with the streaming movement is that it's not as lucrative as song and album sales. At current royalty rates, the standard industry conversion is to count 1,500 streamed songs as an album sale, compared to 10 individual song downloads, The Wall Street Journal reports.

Taylor Swift
Image Source: Flickr (Ronald Woan)

Things could get interesting in 2015. Taylor Swift in late 2014 decided to pull most of her music off of Spotify just as she released her newest album, "1989." She called the streaming movement a "grand experiment" and, in short, decided it wasn't working out financially.

Her decision prompted a response by Spotify CEO Daniel Ek, who pointed out that Spotify paid over $2 billion to music labels, publishers, and collecting societies to date for.

"The music industry is changing – and we’re proud of our part in that change – but lots of problems that have plagued the industry since its inception continue to exist," Ek said. "As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem."


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