It’s no secret that music revenue has consistently been plummeting due to uncontrollable variables such as piracy and a decline in physical album sales. In 2015, however, saw a meaningful increase in revenue for the first time in almost two decades.
The International Federation of the Phonographic Industry’s 2015 digital music report was release April 12, reporting revenue rose more than 3% in 2015. This may not seem like much, but it is, considering 2015’s total revenue topped $15 billion. The last time an increase was “notable” was in 1998, with a 4.8% increase.
This increase benefits many different interest groups in 2016, however the revenue increase came from services such as paid subscriptions (iTunes, Spotify, etc.) and ad-supported services (YouTube, Pandora, etc.). The video platform is currently negotiating with the three major record labels, whose contracts with YouTube have either already expired or will this year.
The RIAA criticized YouTube last month, stating that the platform doesn’t pay an equitable share of royalties given the surging use worldwide. To put this into perspective, the same report showed that vinyl sales surpassed that of advertising revenue on YouTube. The RIAA’s 2015 digital music report revealed that 4% of global revenue from recorded music – around $600 million – is collected from ad-supported platforms. YouTube is by far the largest player in this category, with 900 million users worldwide.
Paid music subscribers totaled 68 million in 2015, up from 41 million in 2014. When we look at services like Google (who has paid out over $3 billion to the music industry in 2015, according to YouTube representatives in a statement made from The New York Post), we wonder what is going wrong.
YouTube claims that they are helping artists and labels monetize the industry, whereas others aren’t so optimistic. Hopefully the rest of this year sees an equal influx of revenue, or our favorite music streaming services may be in trouble.