Spotify, Apple Music give music industry its best year in 20 years

After playing the blues on repeat for a while, the music industry can mix its playlist up a bit after sales climbed 11 percent last year, the biggest jump in about two decades.

Streaming services Spotify and Apple Music helped propel the growth, with streaming accounting for 51 percent of sales — the first time it has represented the majority of revenue.

Such streaming services had more than 22 million U.S. subscribers in 2016, according to the Recording Industry Association of America. (Spotify, the leader, has more than 50 million paying subscribers worldwide. Apple Music said late last year it has about 20 million subscribers.)

But Cary Sherman, chairman and CEO of the RIAA, warned on Thursday that the industry’s “recovery is fragile and fraught with risk.”

After all, when was the last time you bought a CD?

Because CD and digital-album sales are on the decline, the music business is half the size it once was, the RIAA said. Near the beginning of the dot-com boom, in 1999, U.S. music sales totaled almost $15 billion. Last year, they rose to $7.7 billion after being flat for the past several years.

“The unfortunate reality is that we have achieved this modest success in spite of our current music licensing and copyright laws, not because of them,” Sherman wrote in a Medium post.

It’s a familiar tune: The music industry knows it has to roll with the technological punches and advances, but it isn’t going to be quiet about it. Musicians hated Napster, when people were downloading music for free. Nowadays, they aren’t too keen on the streaming model, which they say doesn’t pay them enough in royalties. Or YouTube, which they say is even worse.

Sherman calls the way we get music now “a rigged system” that devalues musicians’ work.

He liked 2016 and the industry’s growth, but said it “does not erase 15 years of declines, or continuing uncertainty about the future.”

 

Photo: An ad for Apple Music on the streets of Manhattan on Aug. 7, 2015. (Andrew Burton/Getty Images)

 

 

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