The music industry is growing at its fastest rate in 20 years, all thanks to online streaming

Massive growth in online streaming of artists such as Drake and David Bowie saw music industry revenues grow in 2016 at their fastest rate since records began, a global industry body said on Tuesday, even as physical sales fell again. The global market for recorded music grew by 5.9 percent in 2016, the quickest pace since industry body IFPI began tracking the market in 1997. It expanded for a second straight year after losing nearly 40 percent of its revenues in the preceding 15 years, with the recovery driven by a 60 percent rise in income from streaming. In all, digital income accounted for half of the music industry’s revenue for the first time. The industry initially struggled with the demise of the market for physical sales, as the advent of the internet facilitated illegal downloads that crimped profits. However, the rise of subscription-based services such as Spotify has helped it recover, even as the market for physical formats has continued to shrink and download revenues have fallen too. “As an industry, we’ve had years of investment in innovation to make (growth) happen, and we’re starting to see the shift … from adapting to the digital age, to actually driving the digital age,” Frances Moore, the CEO of the International Federation of the Phonographic Industry (IFPI), told reporters in London. Total revenues for the industry were $15.7 billion in 2016, aided by 112 million users of paid music streaming subscriptions by the end of the year. The growth in streaming more than offset a 20.5 percent decline in downloads and a 7.6 percent fall in revenue from physical sales. The top-selling artist was Canadian rapper Drake, while the death of David Bowie spurred purchases to make him the second most popular artist of the year. Prince, who also died last year, was ninth on the list. Despite the improvement, industry executives cautioned against complacency. “We’re only two years into our recovery. We must remain alert, resourceful and ambitious,” said Stu Bergen, CEO of International and Global Commercial Services at Warner Music Group. “We’re no longer running up a down escalator, but that doesn’t mean we can relax.” Reuters