USA: First half of 2014 sees sharp streaming rise as digital downloads decline
US recorded music sales numbers for the first half of 2014 in are in. Nielsen Soundscan in its July report reveals a country in the midst of the biggest shift in music consumption since iTunes started picking up steam in the early 2000s.
On-demand streams have grown 42% year-on-year during the first six months of 2014, racking up over 70 billion streams. These are split fairly evenly between the audio on-demand and the video on-demand spaces.
It’s interesting to note that the growth in audio on-demand streaming services has been much greater than that of video on-demand services. The former grew 35% over 2013 whilst the latter grew 50%. As a consequence, if in 2013 consumers streamed 4,3 billion more tracks on video on-demand services than audio on-demand services, in 2014 that gap is reduced to 3 billion.
The report does not break down sources but it’s fair to say that a large part of the video on-demand streams will be attributable to YouTube or Vevo. In that sense the slowing of that segment’s growth is a sign that the Google-owned service is not about to swallow up the entire industry quite yet.
The steep growth of the streaming market was accompanied by a fairly precipitous decline of digital track sales, confirming that services like Spotify are on their way to substitute iTunes as the primary way of consuming music - in this light Apple's decision to acquire Beats Music makes good business sense.
Digital track sales fell 13% year-over-year in 2014, with digital album sales declining 11.6% in the same period.
The CD market continues its inexorable downwards march with CD album sales losing 19.6% year-on-year. Interestingly though due the parallel decline of digital album sales CDs are still the most popular format for albums with 62.9 million sales versus 53.8 million digital sales.
If you’re looking for a bright spot aside from streaming numbers then vinyl sales may provide some comfort, rising another 40.4% year-on-year to reach 4 million units. They also provide a breath of fresh air amongst the lists of best-selling artists Nielsen adds to the report: the Frozen soundtrack is nowhere to be seen here and Jack White’s Lazaretto, the Arctic Monkey’s AM and Beck’s Morning Phase lead the pack in this category.
As streaming picks up pace it’s interesting to note that while Beyonce’s album, famously released exclusively on iTunes without prior announcements in December 2013, sits at N.2 in the list of top ten selling albums for the first half of 2014, it slips to 5th place when all albums and track equivalent albums are taken into account.
Furthermore, in the overall streaming chart which combines both audio and video Beyonce only places 9th with Drunk In Love at around half the number of streams achieved by Katy Perry with Dark Horse. Beyonce so far has only released four tracks from her album on streaming services.
One has to wonder how different these charts would be if Beyonce had chosen a different release strategy. We haven’t seen any other artist follow in her footsteps yet but for those who plan on doing so the clock is ticking, soon enough an exclusive to iTunes could represent an economic misstep rather than an asset.
The obvious winner in the album category for 2014 is the soundtrack of Frozen that reached 3.3 million sales (including track equivalent albums), over three times the sales of Katy Perry’s Prism.
Finally it’s interesting to note that although not identical in terms of position the streaming charts and the digital download sales charts feature for the most part the same artists and tracks.
It remains to be seen whether the steep declines recorded in album sales will be softened by the holiday season, when traditionally the most albums are sold.
(Andrea Leonelli)