We’ve got some bad news for anyone hoping that streaming music services were just a fad: The industry revenue figures for 2014 have been released and for the first time ever, streaming services made more of a profit than CD sales.
According to the Recording Industry Association of America’s latest report, streaming music services made $1.87 billion in 2014, while CD sales made $1.85 billion. It might not look like much on paper, but that difference indicates a monumental shift in our music industry and culture – albeit one that should not come as much of a surprise. Streaming profits have been steadily on the rise for some time, while CD sales have been on a downward slope.
One fact that may come as a surprise, however, is this: While CD sales are on the decline, physical formats as a whole still make more revenue than streaming services. And no, we’re not counting digital downloads as physical formats.
Just as we see technology pulling the music industry forward, today’s fans appear to be fostering a sense of nostalgia for yesteryear – and that nostalgia is manifesting itself as a bit of a vinyl resurgence. For the first time since 1987, sales of vinyl records reached double-digit percentages in terms of industry profits – and pulled in an impressive $315 million.
We’re entering into a fascinating time when our entertainment culture seems polarized, and people are drawn to both the old and new simultaneously – we have e-readers and hardcover books, state-of-the-art technology and refurbished antiques, MP3s and LPs. And on both sides of debate, fans will passionately defend their preferences.
Meanwhile, the music industry sees some other changes reflected in the new revenue numbers: Ringtones are on their way out, digital radio is up, and digital downloads are still the main breadwinners; however, their profits appear to be decreasing year over year and it likely won’t be long before streaming services surpasses them. Will vinyl continue to rise as well? Only time will tell. In this fast-paced, ever-changing industry, it can be hard to tell what will remain for years to come – and what will prove to be only a passing trend.
For more news and updates from the American music industry, be sure to keep checking back with us right here at HillTop Records.