In case there were any doubters—and let’s face it, there have been some doubters—streaming music is the future of the music industry. The data from RIAA is in and, for the first time ever, streaming music services like Spotify and Rdio made more money than CD sales did.
Streaming music made $1.87 billion in 2014, a staggering 29 percent boost from 2013. CD sales, as you might expect, fell—12.7 percent, to be exact. CDs brought in about $1.85 billion last year, which isn’t much less than streaming music did, but it’s enough to represent a very forceful turning of the tide.
Digital download sales still account for the biggest chunk of profit in the music industry, but even those dipped in 2014, and it’s only a matter of time before streaming services overtake them. In March, Kendrick Lamar’s To Pimp a Butterfly broke Spotify’s single-day streaming record with over 9.6 million plays on the day it released. The former record was set by Drake’s If You’re Reading This It’s Too Late—which was released just the month before.
That’s why the CD industry is clinging to Taylor Swift like a life raft, after she very publicly pulled all her music from Spotify in 2014 and penned a missive about how little money artists actually make from streaming services. She’s right. For example, Pharrell’s “Happy” was played 43 million times in the first quarter of 2014, and he made $2,700.
If Spotify wants to lure the very powerful holdouts (like Swift, Thom Yorke, AC/DC, Garth Brooks and even the Beatles) they’re going to have to figure out how to pay them more. Don’t be surprised if you’re the one who ends up footing the bill.