Lots of People Are Streaming Music, But Vinyl Is Making More Money

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Photo: Jed Egan/Jed Egan

Yesterday, the recording industry’s governing body, the RIAA, released its annual report on the state of the industry, looking at data from 2015. The results, they found, were at the same time hopeful and worrying.

On the one hand, the music industry is getting more comfortable with the internet — more than 70 percent of their revenue in 2015 came from digital. Streaming, specifically, now accounts for 34 percent of American music revenue, up from 27 percent in 2014.

But, there’s a catch:

The consumption of music is skyrocketing, but revenues for creators have not kept pace. In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meager  —  far less than other kinds of music services. And the problem is getting worse.

The RIAA’s grievances mainly come from ad-supported free tiers, the most popular of which is currently Spotify. In this area, the growth in the number of listeners has not grown proportionally to the revenue coming back to the music industry. In other words, the RIAA is arguing that tech companies are hoarding most of the ad revenue for themselves, using outdated regulations to avoid compensating labels and musicians. Huh! A tech company using the creative work of others to build up users and collect revenue! Crazy!

This is not really new information. Artists have complained practically since its inception that Spotify does not compensate them fairly. Taylor Swift famously shook them off (get it?) and removed her catalogue from the service for this very reason.

As a way of driving home their point, the RIAA points out that as popular as streaming music is, vinyl record sales still bring in more money — $416 million in 2015 compared to streaming’s $385 million.

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Photo: Recording Industry Association of America/Recording Industry Association of America

Obviously, the RIAA has a substantial interest in shaming streaming sites into giving them more money. The organization, notoriously slow to even acknowledge the web as a distribution vector, only recently got over its habit of suing individual music pirates for thousands of dollars. So the statistics, while likely accurate, aren’t being presented by a neutral party. The overall takeaway is that while ad-supported streaming is becoming the norm, it’s not exactly helping artists eke out a living.