Music Streaming Services Edge Out CDs In 2014

On March 19th 2015, it was announced that music streaming services had earned more revenue than CDs in 2014. The news is a reflection of new figures released by the RIAA (Recording Industry Association of America). The figures also show that digital downloads are also in decline, while sales for vinyl are on the rise. 

Revenue from streaming services such as Pandora, Spotify, YouTube, and Vevo reached $1.87 billion dollars in 2014, while CD sales accounted for $1.85 billion dollars. The margin is small but may be evidence that streaming services could at some point become the music industry's top revenue gainer.

Over all physical sales were still strong. Physical sales were responsible for 32% of the market while streaming only accounted for 27%. The RIAA maintains that over all music industry revenues remained flat in 2014. In light of that fact, what do to the streaming numbers mean? While some may say that this is clear evidence that music fans prefer not to own their own copy of their favorite releases, the resurgence of vinyl would suggest otherwise.

Even with its modest gains in the last several years, the fact that people are returning to the vinyl format says a lot about the long form presentation's ability to provide the consumer with something that they physically own. Also, while steaming has managed to over take CDs, it has yet to undo digital downloads, even though sales of downloads are in decline. The biggest problem that streaming services face, is how much they are willing to pay recording artists whose content they depend on heavily.

If artists continue to feel that streaming is devaluing their music, their will continue to be more of them pulling their music from those services. Right now, everybody want to get in on what looks like a good thing. But, without the music of recording artists, the whole thing will not happen. It is possible, however, that this is just a shakeout period as new technologies begin to reach more and more people, and the newness of said technologies begins to wear off. If in time this turns out to be the case, then what we may one day find, is a balance between virtual and physical platforms.