Nielsen Music: Streaming has flowed to the top

According to Nielsen Music, 2016 saw the consumption of music grow by three percent over 2015. This increase was quite strongly driven by a 76% increase in demand for audio streaming.

In the Nielsen report, which was shared by ReportLinker, it’s pointed out that while sales across the music industry actually declined in all areas except for vinyl records (which increased for the 11th straight year to over 13M units), the over 250B streams and 431B overall on-demand streams (including video) of 2016 more than made up for the revenues lost on physical and digital unit sales. For the first time in history, streams have surpassed total digital sales, with on-demand streaming now making up 38% of total music consumption.

In physical and digital sales, the rock music genre is still the number one seller, but when it comes to streaming it’s r&b/hip-hop sitting on top of the charts. While revenues from digital sales still dominate even r&b/hip-hop sales, revenues from music streaming are increasing rapidly as music consumers seek more and more cost-saving, space-saving, and mobile-friendly ways of accessing their music.

At the same time, physical album market share increased for the first time in more than a decade. Reasons for this include the growing perception that physical albums (especially vinyl) sound better than digital recordings and a reaction to the “minimalism” of streaming and digital recordings by music lovers who want to own a physical artifact, one which provides more artwork, information, lyrics, etc.

“Nearly 650 solo artists, groups and collaborators appeared on the Top 200 Song Consumption chart in 2016, representing over 1,200 different songs.”

There was significant change even with the physical music sales realm. For the first time in history, the internet/mail-order/venue store group, with Internet retailers and concert ticket bundle sellers leading the way, has captured the largest market share, putting an end to a nine-year period during which mass merchant outlets drove the most physical album sales.

But again, 2016 was a record-setting year for music streaming. Twenty-seven songs broke the 200M on-demand audio streaming barrier, in contrast to only two songs in 2015. In addition, 12 songs surpassed 200M on-demand video streams in 2016, while only seven achieved that feat in 2015.

Three songs broke the 500M total on-demand audio streams barrier in 2015, with Fetty Wap’s “Trap Queen” leading with 617M. But in 2016, that total was doubled to six songs surpassing 500M. Two of those (Desiigner’s “Panda” and Rihanna’s “Work”) went beyond 700M.

Chance the Rapper achieved an historical accomplishment for music streaming as well. He became the first music artist to surpass 500K in streamed album equivalents with his streaming-only album Coloring Book. Debuting in May of 2016, the album stayed on the Billboard 200 chart through the whole remainder of the year, peaking at #8, to become the 58th highest volume album of 2016 without even a single physical or digital sale.

While physical and digital song and album sales remain important, 2016 saw the rise of streaming. That trend shows no sign of abating in 2017 and beyond.

Author: Buddy Iahn

Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.