Last week, the Recording Industry Association of America broke good news for the sector it monitors: Music revenues in 2016 were the highest they’ve been in eight years, and year-over-year gains of 11.4 percent were the largest percentage increase seen since 1998. This growth has been almost entirely driven by the rise of streaming, the technology long discussed as the potential savior of the beleaguered music business and that’s now, finally, maybe making good on its potential.
But there are some caveats. The music industry remains greatly diminished since its turn-of-millennium heights: 2016’s $7.7 billion in revenue is only half of the approximately $15 billion that was being made in 1999. The internet—piracy, cheap single sales, and free streaming—largely caused the declines seen in the 2000s. So if streaming is helping now, it is first helping to offset the enormous losses caused by the technology that enables it.
And while the industry may have bounced back a bit from rock bottom, there are forces that could pull it back down. Revenues from CDs and digital sales (songs and albums purchased a la carte on iTunes or other such services) have continued to decline in drastic measures—CDs by 21 percent year over year, downloads by 22 percent. In 2016, those losses were offset by streaming’s rise (and by vinyl’s continuing resurgence, which has brought it to 26 percent of the physical sales market—the highest percentage since 1985). But whether that dynamic continues is unknown: 2016 was either the start of a significant period of streaming growth, or a one-time boom.