Music streaming services accounted for $1.87 billion revenues for the music industry in 2014 in the US, as compared to $1.85 billion from CD sales. This is the first time in US that revenues from music streaming services has surpassed that from CD sales. This was first reported by The Verge.
A report (pdf) released by the Recording Industry Association of America revealed that in 2014 revenues from music streaming services accounted for 27% of overall revenues. Digital downloads accounted for 37% of revenues, physical sales for 32%, synchronization for 3% and ringtones & ringbacks for 1% of total revenues. Music streaming services included subscription-based services like Rhapsody and paid versions of Spotify among others, streaming radio services such as Pandora and SiriusXM among others and other non-subscription on-demand streaming services like YouTube, Vevo and free versions of Spotify among others.
While permanent digital downloads (read iTunes) still contributes the highest share to overall revenues at 37%, it needs to be pointed out that revenues from digital downloads have declined by 8.7% year-on-year (YoY). On the other hand, revenues from music streaming services increased by 28.8% YoY. So, it’ll be interesting to see how long it takes for music streaming revenues to overtake digital downloads.
Music streaming in India
Though music streaming services are still at a relatively nascent stage in India, there is a clear trend that consumers are increasingly moving towards digital music platforms. Gaana.com* VP & Business Head Pawan Agarwal had told MediaNama, earlier this year, that they were witnessing 2-3x the consumption from one year ago. That there is an increasing demand for music streaming services in India is also clear from the number of such new services launching and international players entering the market.
– Amazon India is apparently planning to offer music and video streaming services later this year.
– Reliance Industries’ data service venture Reliance Jio is also developing a music streaming service called Jio Beats, which is expected to launch along with the company’s 4G service.
Established players like Gaana, Hungama and Saavn have been introducing new features and expanding their catalogs to keep consumers engaged.
However, there are issues that need to be addressed before the music streaming sector can truly flourish in the country. Prohibitive licensing policies from record labels have been blamed for players such as Dhingana and Flipkart Flyte shutting shop, in the past. On a more positive note, T-Series ended its exclusive approach to mobile last year, and allowed Saavn and Gaana to start streaming over 133,000 tracks from T-Series catalogue on mobile.
*Disclosure: Airtel and Gaana are advertisers with Medianama.
Note: Headline has been edited for clarity.
Image Credit: Flickr user Johan Larsson