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Streaming music services made more money than CD sales for the first time ever

on March 19, 2015, 8:36pm

While many artists continue to slam music services like Spotify, Jay Z and Phish have taken the road less traveled and actually invested in streaming businesses of their own. And it looks like they just might have the right idea: According to a new report from the Recording Industry Association of America (RIAA), last year streaming services pulled in higher revenue numbers than CDs for the first time in history .

In 2014, streaming services raked in $1.87 billion, compared to CD sales which accounted for $1.85 billion. The achievement, though impressive, isn’t too shocking, however — as the report shows, streaming profits have been on the rise for some time now, growing a whopping 29% last year alone.

Although CDs are on the decline, physical formats as a whole still retain a larger share of the music industry’s overall revenue pool than streaming services (32% vs. 25%), as illustrated in the pie chart below. Part of the physical formats’ success might be attributed to the vinyl resurgence, which, for the first time since 1987, reached double-digit percentages and brought in a solid $315 million.

Digital downloads lead the whole pack, commanding 37% of the entire industry’s earnings. However, its falling numbers suggest that it won’t be long before Pandora and the like are able to catch up.


Streaming music services revenue