2016 was a good year for the music industry. According to IFPI’s latest Global Music Report, worldwide recorded music revenues totaled $15.7 billion last year, up 5.9 percent from the previous year’s total of $14.8 billion. This marks the second consecutive uptick in sales for the music industry after nearly two decades of gradual decline.
Interestingly, it has been the transition to digital formats that has both fueled the decline and helped stop it. A 60 percent increase in streaming revenues propelled total digital music revenue to $7.8 billion in the past year, offsetting the ongoing decline in CD and other physical format sales.
It appears as if the music industry bottomed out in 2014, when revenue was at a 20-year low of $14.3 billion, nearly $10 billion less than it had been 15 years prior. By now, both consumers and the industry have come to accept that the future of music lies in digital distribution. IFPI estimates that the number of paid streaming subscribers reached 97 million by the end of 2016 with no ceiling in sight. Market leader Spotify recently passed the 50 million subscriber mark and Apple will be hoping to pass that milestone as well in the not too distant future.