Streaming fuels US market growth

Streaming fuels US market growth

The growth of streaming consumption in the US during the first half of 2016 points towards a significant increase in digital revenues for the year.

Music consumption in the US has been growing by 6.5% in the first half of 2016, with audio streaming more than doubling activity (+108%) over the same period last year, according to Border City Media’s data service BuzzAngle Music.

"The recording industry can thank ongoing growth of on-demand streaming for most of the uptick,” notes Border City Media CEO Jim Lidestri. A total of 209.4 billion on-demand streams, up 58% year on year, were registered by BuzzAngle in the first six months of 2016, more than half being audio streams (114 billion, up from 54.9 million, or 55% of total streaming consumption). For the first time, streams from audio services exceeded video streams. Video streams accounted for 95 billion streams, up 23% from the same period in 2015.

Josh Friedlander, SVP of Strategic Data Analysis for the Recording Industry Association of America, says the growth is “a good sign” but adds that the key issue for the industry is whether this growth in streams will convert into growth in revenues.

"Broadly, this report suggests a continuation of the trends we saw in 2015, when US revenues from streaming music exceeded $2 billion for the first time,” Friedlander tells Music Week. "Growth in streaming, especially audio-only on-demand which are largely driven by paid subscription services like Spotify and Apple Music, are good signs as current signs point to this being future of the industry.”

He warns, however, that “no one metric is perfect, and this data is helpful in understanding the market, but the revenue impact for the industry for the first half of 2016 is still to be determined. More so than just streaming volumes, that’s what’s going to continue driving the industry."

Elsewhere, according to BuzzAngle, digital song sales "continue to fall quicker than digital album sales in 2016,” declining by 24.2 % at 410 million and 17.7% at 45.8 million, respectively. At 40.3 million, physical album sales fell by 9% from the first half of 2015, while total album sales dropped 14% to 86.2 million units (using industry standards: 10 song sales or 1,500 streams = 1 album sale; 150 streams = 1 song sale).

CD sales of albums dropped 11% to 37.2 million, while vinyl album sales continue its decade-long increase, with a 17% gain over mid-year 2015. 

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