With the music industry undergoing constant change, there is no doubt that online streaming services such as Pandora, Spotify and even YouTube are generating revenues for both record companies as well as artists.
A recent music sales report, confirms this conclusion, in writing, “Technology companies’ deep pockets and intensified rivalry to attract and retain paying users within the respective ecosystems is a credit positive for the content owners, providing a better return on their music catalogs.”
However, the question is whether this impacts the sales of CDs and downloads as a result. And so far, the answer to that question is in the negative – not for now, at least.
As a whole, sales amounting to $3.2 billion was made in the first half of 2014 and which was down by 4.9 percent during the same period in 2013. During this period, revenue from downloads and streaming amounted to $2.2 billion which remained the same from 2013 as well.
However, while downloads amounted to 69 percent of the total amount last year, it dropped to 60 percent in 2014. This has become a major worry for a number of services includes iTunes whose sales shot up in 2003 but began to plummet sharply in 2013.
As for CD sales, their sales continue to drop while quite surprisingly, vinyl sales have seen an improvement considering how they regarded as collectors’ items these days.
That said, record companies can only stand to gain from streaming services as they charge licensing fees, which are substantial, to play their songs.