For the First time, US Revenue from Streaming Services Surpasses from That of CDs
Streaming music services are getting popular day by day. This is substantiated by plummet in the revenue generation of CDs in the US where streaming services have seen an increase in the profits.
According to the data published by Recording Industry Association of America, streaming music services made sales worth $1.87 billion in 2014 while in the same year, income form CD sales was $1.85 billion.
Apparently, the revenue seems not very different but, alarming fact for CDs businesses is the 12.7 percent drop in revenue. Popular streaming services however increased their revenues by 29 percent last year. The key players responsible for the rise in streaming revenue include subscription services like Spotify and Apple’s Beats Music, radio like Pandora and Sirius XM, and ad-supported operations like YouTube and Vevo.
Major contribution in the US Music industry was, as mentioned above, made by streaming services. Their share in the total revenue was 27%. This was an increase of 6% in its contribution in 2013.
The most successful in terms of revenue was still digital downloads. Their revenue decreased 8.7% to $2.58 billion but its slice in the total revenue of the market was equivalent to 37% which was less than its contribution of 40%, a year before. Digital downloads have been champion when it comes to revenue generation in the US industry. But since 2012, there have been a serious decline in their sales.
“The music business continues to undergo a staggering transformation,” said Cary Sherman, chairman and chief executive of RIAA. “Record companies are now digital music firms, earning more than two-thirds of their revenues from a variety of digital formats.”
These huge disparities in the revenue generation fairly suggest that the next vogue in the US music industry is going to be the streaming services. The charm of the physical medium has been relinquished. Has it?
What’s your take on the story? Share your views in the comments section below.
Abubaker Zahoor writes on diverse topics with special interest in innovations, tech-ethics, and inter-and intra- organizational business relationships.