Online streaming services like Spotify and Apple Music have become the recording industry’s single biggest revenue source, overtaking physical sales of CDs and digital downloads for the first time, a trade group said on Tuesday, reports REuters.
The rapid growth in streaming music services in recent years has led to a recovery in the fortunes of the global recorded music industry, which enjoyed its third year of positive revenue growth, according to a report by industry body IFPI.
Figures released in IFPI’s Global Music Report 2018 show total recording music revenues for 2017 rose to $17.3 billion, up 8.1 percent from the previous year.
Improving finances have led to a tentative re-evaluation of the music industry by stock market investors, who had shied away from the struggling media category for much of the past decade due to a wave of piracy by users and major technology shifts.
Just in the past month, streaming music subscription leader Spotify of Sweden held a record-setting public stock offering. France’s Vivendi, the owner of Universal Music Group, the world’s biggest music label, said last week it was mulling a stock market listing of its wholly owned music unit.
Tencent Music Entertainment (TME), which attracts three-quarters of China’s booming music streaming market, has been reported by The Wall Street Journal to be eyeing a listing later in 2018. TME is controlled by internet giant Tencent.
Industry leaders say the growing adoption of paid music streaming services is enabling the market to reach new regions of the world while helping weaning a generation of music fans away from free or pirated music.
“We estimate that only half the world’s population lives in a thriving music environment and we want to bring the streaming revolution to all of it,” Stu Bergen, from Warner Music Group, told reporters in London.
During the 15 years ending in 2014, music sales plunged by 40 percent to $14.3 billion after music file-sharing services such as Napster ravaged sales of CDs while the rise of download services like Apple iTunes failed to offset those declines.
IFPI – The International Federation of the Phonographic Industry – charts the recent recovery to the rise of streaming music. It said there were 176 million users of paid streaming subscription services in 2017.