- The music industry was on the brink of collapse around 2012 due to surge of illegal downloads
- The rise of streaming services have shifted consumers back to paying for music, which the music industry is profiting from
At the start of this century, the music industry was riding high on CD sales making over $20B annually. Then came illegal downloads from Limewire and Napster and the music labels’ revenue from albums and singles plunged by two-thirds over the next decade.
These days, people have largely shifted to paid streaming platforms such as Spotify (NYSE:SPOT), Apple Music (NASDAQ:AAPL), Amazon Prime (NASDAQ:AMZN) and Pandora (NYSE:P). Generally these charge $5 to $10 a month for unlimited access to millions of songs.
Even though the labels only get a fraction of a cent each time a track is played, the money adds up.
Since 2014, record company sales have jumped an average 7% annually and streaming has become the top source of revenue.
It generated $6.6 billion in 2017, up from $1.9 billion in 2014, according to estimates from the International Federation of the Phonographic Industry. With streaming services growing in popularity globally, record labels will continue sharing a piece of the pie, albeit it smaller than the glory days.
Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.