Music Industry Sees First Big Gains in 20 Years Thanks to Streaming Services

Thanks to subscription-based music streaming services, the music industry is seeing a significant growth for the first time in nearly two decades. According to International Federation of the Phonographic Industry (IFPI), an industry trade group, the global music sales rose 3.2 percent last year, also surpassing those from all physical music formats. The important tipping point in 2015 saw digital services account for 45 percent of recorded music revenue. According to the report, Spotify, Apple Music and other music streaming services brought in about $2.9 billion in revenue. The findings are in line with Recording Industry Association of America (RIAA)'s estimates from last month. IFPI also noted that music on free streaming services such as YouTube has also grown quickly, creating a panic among record labels and artists alike. Billboard elaborates that aspect: In criticizing ad-supported services, the IFPI joined a growing list of trade bodies and music company executives to criticize YouTube for paying royalties that are relatively low when considering its popularity. The report argues YouTube distorts its negotiations with labels by hiding behind the DMCA "safe harbor" rules that limit the liability of online intermediaries from the infringing actions of their users. The result, the IFPI argues, is YouTube can use an "act first, negotiate later" that "fundamentally distort[s] the negotiation process."

Comments

There is only one group missing out on royalties

[fustakrakich]

The artists who create the material. Like most people who have to actually work for a living, they are too submissive in negotiations, especially now that self publishing is comparatively trivial to past times when physical media was required.

Re:Napster was a visionary leader

[careysub]

There has been a long tradition of the music industry (even before it was the recording industry) of fighting any technological innovation since it would disrupt their current business model. Industries that make money by controlling access to other people's creativity are like that.

The music industry convinced itself that its CD era peak revenue period from 1994 to 2000, when a few generations of music lovers were rebuying their entire music collection in the superior CD format, was their "natural revenue level" and any decrease from the anomalous high point was due to "Piracy! Piracy I say!" rather than the inevitable technology-driven business cycle, seen several times before. They then spent the next decade feverishly fighting digital music, the upcoming format that would replace CDs, rather than working on consumer-friendly ways to exploit it, driving their own revenues into a ditch by pissing off the next generation of music consumers with lawsuits and DRM.