U.S. music industry is making money again. Thanks, Spotify (and Apple)

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U.S. music industry is making money again. Thanks, Spotify (and Apple)

Over the last six years, the music industry has had to reinvent itself, RIAA said. Everything seems to be going well, right?

While Pandora Plus is priced at $4.99, the Spotify and Apple Music are being offered at $9.99 for monthly subscription.

The RIAA released their sales data for the first half of 2016.

According to a report from the Recording Industry Association of America (RIAA) obtained by Bloomberg News, retail spending on recorded music grew 8.1% to $3.4 billion in the first half of 2016. Music streaming revenues accounted for 47% of industry revenues compared to just 32% over 2015.

After nearly two decades of relentless decline caused by piracy and falling prices, the music business is enjoying a fragile recovery thanks to the growth of paid streaming services like Spotify and Apple Music. IHeart Media also plans a paid streaming service, the New York Post reported Tuesday, citing people with knowledge of the matter.

At the same time, the number of people paying for a subscription music service in H1 2016 grew 101% to 18.3m, up from 9.1m the year before. This year, however, revenue from streaming has overshadowed revenue from digital downloads, with revenue from ringtones and ringbacks having slowed to a trickle. "Streaming became the overall largest revenue contributor by a wide margin".

Vinyl album (LP) and EP sales were down 6.3% by value during the first half of the year, to $207.1m. Similarly, revenue from sales of all physical formats also dropped 14% to $672 million during the period. Looking at subscription services by revenue, the segment more than doubled their value as well, generating $1.013 billion from 2015's $478.6 million. SoundExchange distributions experienced growth, too, to around $403 million.

USA streaming revenue grew 57 percent to US$1.6 billion in the first half of this year and accounted for about half of industry sales, more than countering shrinking purchases of albums and singles. The RIAA states that the total value of digitally distributed formats was $2.7 billion, up 16% over the same period a year ago. Yet, permanent digital downloads revenue, including albums, single tracks, videos, and kiosk sales, took a steep 17% dive to just about $1 billion.

Within digital download sales, album and single sales both fell with digital album downloads totaling $500.1 million from 48.2 million albums, while track sales totaled $519.5 million from 432 million track downloads.

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