The growth of online streaming is showing no signs of slowing and more traditional methods of listening to music could be at threat.
That’s according to the Recording Industry Association of America (RIAA), which revealed that sales generated by online streaming exceeded CD sales in the US for the first time ever in 2014.
The RIAA revealed that music streaming accounted for $1.87 billion last year, compared to $1.85 billion of CD sales. The popularity of services like Spotify, Pandora, Rhapsody and YouTube saw streaming revenue increase by 29 per cent in 2014, while CD revenue fell by 12.7 per cent.
The rise of online music services has rocked the global music industry. Subscription services have hit physical sales hard, meaning that only three artists had an album go platinum in 2014: Taylor Swift, Ariana Grande and country star Jason Aldean.
In total, music sales in the US fell by 0.5 per cent to $6.97 billion, with Apple’s iTunes still making up the largest proportion of sales with $2.58 billion.
The rest of the RIAA data revealed that streaming services are continuing to eat into the revenue streams of more established music mediums. Streaming made up just five per cent of the industry’s sales in 2008, but now constitutes 27 per cent. In 2014, digital downloads made up 37 per cent of the market, while physical sales, including CDs, tapes and records, made up 32 per cent.
The information also showed the difference in market value of free ad-supported platforms compared to subscriptions services. Free music streaming sites like YouTube showed significant growth of 34 per cent, but still only received $295 million in revenue. By contrast, paid subscription services like Spotify took $799 million.
The growth of digital music platforms is still one of the biggest challenges facing the music business and the data from the RIAA merely highlights that this is an issue that is not going to go away.