Some record labels have had their biggest revenue rise in more than a decade thanks to streaming services such as Spotify and Apple Music.
There are 90 million people signed up to streaming services worldwide and the aggressive speed at which it has taken place, is having the greatest impact on music since digital downloads were introduced.
Five years ago, the demise of the music industry seemed almost inevitable. Recession, rampant piracy, falling CD sales and a fear that “kids just don’t buy music any more” had giant record labels, once oozing wealth, counting the pennies.
Yet the year 2016 to present has seen a reversal of fortune – and the industry’s saviour is not what many predicted. Profits from music streaming, first championed by Spotify and now offered by Apple and Amazon, have given some labels their largest surge in revenue in more than a decade.
At the beginning of December, one of the world’s biggest labels, Warner Music, announced revenues of $3.25bn (£2.66bn) this year – it’s highest in eight years. More significantly, $1bn of that was from streaming, more than double its download revenue and more than $100m more than its physical revenue.
The surge in profits is being seen across all the major labels.
In the first half of 2016, streaming revenue in the US grew by 57% to $1.6bn, and worldwide digital revenues overtook those from physical sales for the first time in music industry history, mainly because of streaming. This year’s most-streamed artist was Drake, with 4.2bn streams.
Main source: the Guardian