Streaming music sales surpass digital downloads for the first time

It’s good news for Apple Music, not-so-good news for iTunes. New data from the Recording Industry Association of America (RIAA) shows that streaming music sales surpassed digital downloads as the recording industry's single biggest source of revenue last year. According to a report from the trade organization that represents the recording industry in the United States, streaming generated $2.4 billion in 2015 and contributed 34.3% of overall sales.

One of the key factors behind this growth is the increased integration of streaming applications with social media platforms such as Facebook, according to the RIAA. For instance, the collaboration between Spotify and Facebook allows new Spotify users to access the application via Facebook and share custom playlists with their friends. A report on the global music streaming service projected the market to continue growing at a rate of 12.57% until 2019.

The RIAA says streaming services like Spotify are overtaking digital stores like Apple's iTunes. Revenue from digital albums declined 5.2% in 2015, while sales of singles declined 12.8%. The digital music market had been expected to benefit from the rising penetration of mobile devices, but this hasn't been the case. What’s more, the mobile music streaming market is expected to grow 28.07% by 2019.

The RIAA says record labels are pushing services like Spotify to convert more free users to paid subscribers. Paid streaming services accounted for half of overall streaming sales, as the number of paid music subscriptions grew to 13 million by the end of 2015. A large proportion of Spotify users are still using the free service.

In February Apple said that Apple Music had passed 11 million subscribers. Billboard, the music industry trade publication, says Apple’s music streaming service is accelerating the subscription growth trend. 

“While it's possible Apple Music is siphoning off the growth of other services, given Spotify's growth rate and the size of the numbers at play, the more likely explanation is Apple Music found 11 million new customers that would not have otherwise paid for a subscription service,” says Billboard. “With its global presence and relationships with hundreds of millions of music consumers, Apple has a unique ability to attract first-time subscribers.