Thanks to the expedited turnaround of our new digital age, Nielsen's latest annual report has already become available and (spoiler alert) the news is good. Most numbers gathered over the past year seem to indicate a happy, healthy music industry.Guest post by Bobby Owsinski of Music 3.0
It used to be that you’d have to wait for the music industry reports from the previous year to be released in late February or early March, but our wonderful new digital music world has turned that around. Nielsen Music’s latest annual report
is now available, and it helps us gauge the health of the current recorded music business. To put it simply, the report tells us that it was much better than 2017 and looks like it will be even healthier this year too.
The report centers on the fact that total album equivalent audio consumption was up 23% over 2017, mostly thanks to a 49% increase in on-demand streams from services like Spotify and Apple Music, among others. I take some issue with the “album equivalent” metric (where 1,500 streams from an album is equivalent to one album sale) as it can be gamed and doesn’t accurately depict how the songs on an album are being consumed, but that’s all we have right now so it will have to do.
That aside, there’s a lot to be excited about if you’re active in the industry today. According to Nielsen:
- “Music streaming volume continued to rise, with the total number of on-demand audio song streams reaching 611 billion in 2018, a sizable 49% increase over the same time period in 2017.
- Overall on-demand music streaming volume, including video, surpassed 900 billion streams, an increase of 43% over the same period last year.
- Vinyl continued to soar, up 15% over the same period last year with record-breaking sales during the week of the 11th annual Record Store Day.
- Despite sharp declines in Digital purchasing, Digital Audio consumption (digital albums + track equivalent albums + on-demand audio streaming equivalent albums) was up a healthy 34%.
- Four songs surpassed 1 billion on-demand streams this year, including Drake’s “God’s Plan”, Juice WRLD’s “Lucid Dreams (Forget Me)”, Drake’s “In My Feelings” and XXXtentacion’s “Sad.”
The report also spots 5 interesting trends. These include latin artists getting more traction on the top of the charts than ever, Drake breaking consumption records, more than double the number of female artists on the charts from the previous year, soundtracks scoring big with consumers, and K-Pop finally breaking through big in the U.S. (mostly thanks to BTS).
Country music is also gaining steam on streaming services, as the genre racked up almost 51 billion streams last year, a 46% increase over 2017. Physical product sales declined just like in other genres.
The take away here is that country music fans have held out the longest from converting to streaming as a way of consumption. With the tide now turned that way, I think we can say that the musical consumption shift to streaming has truly hit critical mass across all genres and isn’t turning back (at least until the next hot format breaks).
All of the above numbers are skewed slightly because the measurements for 2018 were based on a 53 week year. According to Nielsen, this was due to a quirk in the calendar were the year ended on January 3, 2019 instead of the usual last week in the December.
This is a good time to be in the music business. Despite what the naysayers had predicted, streaming has indeed been a lifeline for the industry. The revenues have dramatically increased, piracy is no longer a concern, and the major record labels are no longer the gatekeepers that they were (good for some, not for others). The Nielsen numbers bear it out.