As streaming music continues to grow, it's crushing the format that at one time drove the growth of popular music. According to sales statistics released Tuesday by the Recording Industry Association of America, sales of single tracks, in both physical and digital formats, have declined significantly through the first half of this year, as customers get more accustomed to accessing individual songs on both free services like YouTube and paid ones like Apple Music.
“The data continues to reflect the story of a business undergoing an enormous transition,” RIAA Chairman and CEO Cary Sherman said in a statement accompanying the numbers.
For the most part, the new RIAA figures confirm what industry observers already knew: Streaming is way up, and physical sales have continued their systemic decline. Streaming revenues from subscribers paying monthly fees for access to services like Spotify or Pandora rose nearly 25 percent, to $477.9 million. Ad-supported streams rose more than 27 percent, to $162.7 million.
On the other side, physical sales continued their yearslong decline. The total retail value of physical sales declined more than 18 percent, to $691.5 million. CD album sales fell more than 31 percent, to $494.8 million. CD singles, a format that’s been on life support for a while, cratered. Retail sales fell more than 81 percent, to just $600,000, the first time that format has fallen below $1 million.
Digital sales, once regarded as the great hope for the music business, were mostly flat, but the sale of individual songs declined more than 9 percent, to $687.6 million. When Apple launched iTunes over a decade ago, many in the industry worried that consumers would abandon the album in favor of downloading one or two songs at a time. Yet digital album sales are hanging tough; through the first half of 2015, they rose 4 percent, to $571.5 million.
Feel The Drop
But as people get more and more comfortable with the idea of accessing songs for free, the habitual shift imperils plenty of artists who make their living from selling songs one at a time rather than full-length albums. This is especially true of electronic artists, who typically release individual tracks or singles for years before they have amassed enough material for a full-length album. Today, rather than expecting fans to download their songs for $1.29 or more, they must content themselves with fractions of pennies earned when their songs are streamed.
The stores that specialize in electronic music are feeling the pain too. Beatport, a popular electronic dance music e-tailer that attracts more than 50 million users a year, saw its second-quarter sales revenue fall 25 percent, from $12 million to $9 million, according to the most recent earnings statements of its parent company, SFX Entertainment. The lion's share of its sales come from users buying tracks one at a time, rather than purchasing a full album or compilation of tracks.
To keep up with its customers' changing tastes, Beatport has pushed into streaming as well. In February, Beatport launched a streaming service in beta before moving to a wide release in March. In July, it entered into an agreement with Spotify to move its catalog and its videos onto the popular streaming service.