Streaming revenue edges out CDs in US

NEW YORK (AFP) - Streaming has topped CD sales in revenue for the first time in the United States as music listeners flock to on-demand services and Internet radio, industry figures showed.

Data for 2014 showed a major shift to streaming as opposed to physical sales and permanent downloads, with rapid growth both for on-demand services such as Spotify and Rhapsody and Internet radio providers such as Pandora.

Streaming revenue totalled US$1.87 billion (S$2.6 billion), edging out the US$1.85 billion earned by CD sales, according to data of the Recording Industry Association of America.

Streaming helped stabilise the bottom line for the long-troubled industry, with overall revenue from recorded music going up two percent to US$4.86 billion to mark the fourth year of growth.

"The industry continues to rapidly grow the share of revenues coming outside of traditional unit-based sales," the association said in a report Wednesday.

Whatever the bottom line, the growth of streaming has been controversial with numerous stars complaining that the revenue sent back to artists is paltry.

Pop superstar Taylor Swift is the most vocal critic of streaming and last year pulled her catalogue off Spotify, which offers free access.

Bjork has also refused to stream her latest album Vulnicura, saying she felt uneasy giving out the emotionally intense work for free.

Spotify has hit back by describing itself as a rare source of growth in the music industry and has said it has distributed US$2 billion back to artists over the past seven years.

The US association said that CD sales fell by 12.7 per cent last year.

But some of the strongest growth in the industry was in vinyl, which has enjoyed a resurgence in recent years among collectors.

Revenue from vinyl albums and EPs jumped by 50 per cent, although the total of US$315 million was still a fraction of the market for CDs or digital formats.

Despite the sharp growth of streaming, permanent digital downloads on services such as iTunes remained the largest overall category for revenue.

The United States is the world's largest music market. Format tastes have significant differences around the world, with CDs still dominating Japan but streaming taking off in Scandinavia.