Nielsen Report: On-Demand Music Streaming Increased To 38 Percent Of Total Listening In 2016

Music streaming services managed to register a very significant growth in 2016. According to a report published by Nielsen Music just this week, music streaming surpassed digital sales of music for the first time in the United States market. This is another proof that consumers, especially mobile users, are steadily veering away from consuming music by way of digital downloads, from service providers such as Apple’s iTunes, and turning instead to music streaming service providers. This trend has the overall effect of transforming the music industry, effectively making subscriptions as the new sales model to adhere to. This pattern began nearly a couple of years ago, and has since ballooned ever since, helping to post gross sales growth of recorded music to its best level since the introduction of the compact disc (CD) back in the 1980s.

As explained by David Bakula, the senior vice president for music industry research at Nielsen, 2016’s numbers suggest that the music landscape in America is indeed undergoing some major changes, and it is doing so at an unprecedented rate. As early as a few years ago, digital sales were once thought to be the new approach to selling music, but as shown last year, music consumers are willing to adapt to new things incredibly quickly. Intriguingly, 2016 saw digital sales decline at a faster rate compared to how physical album sales did when people starting downloading music instead of purchasing records from music stores.

As for on-demand music streaming (paid music streaming), it managed to grow to 38 percent of total listening consumption in 2016. Nielsen is quick to point out that that share is the biggest among all listening consumption categories. Also, this share overtook total digital sales for the first time since Nielsen started tracking it. 

Big credit goes to music streaming service providers, which have grown to be more popular than ever. In September of last year, it was reported that sales of streaming music in the US increased 8.1 percent to $3.4 billion in the first half of 2016, that is compared with the same period in 2015. At that time, this growth represented the best growth since the late 1990s.

It is safe to say that more and more people now are willing to pay $10 monthly in order to subscribe to a music streaming service provider, like Spotify or Apple Music. In the first six months of last year, the average volume of music subscriptions was at 18.3 billion, easily twice the 9.1 million achieved at the same time in 2015.