GERTRUDA DAMBRAUSKAITE
A2 Media Portfolio
Decline in CD sales and how artists make money
There is a trend towards the decline of CD sales in the past five years. For example sales of CDs in the US dropped by 31.5% in the first half of 2015, according to music industry figures. In fact, only 41 million CDs were bought between January and June, compared to the 56.8 million in the same period last year.
These losses were mainly offset by the growth in streaming services, which grew 23% to reach £697 million. Streaming is now responsible for one-third of the US music industry's income, which remains relatively flat, with total revenue down by 0.5% to £2.05 billion. Wholesale revenues that show what distributors and record labels actually receive rose by 0.8% to £1.5 billion. However, the vinyl revival continued, amid an increase in new independent record shops. Also, the sales of LPs grew by 52% in the first half of the year, raking in £143 million, roughly half as much as CD sales. However, according to Recording Industry Association of America (RIAA), overall value of vinyl was still far smaller than CDs or digital download.
RIAA Chairman Cary Sherman said that the figures portrayed "the story of a business undergoing an enormous transition." and noted that "intense demand and billions of streams does not always equal fair market rates or a fair playing field". There has been an increase in the competition between different streaming services with the introduction of Apple Music and Jay-Z's Tidal in 2015 as well as, Amazon's entry into the market to compete with other streaming services such as Spotify, Deezer and Google Music.
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However, the revenue from digital downloads is still worth more than streaming, totalling £842,000 despite declining by 4% with Taylor Swift's 1989 was the biggest-selling album in the first half of 2015, selling 1,328,000 copies (2,011,000 copies including streaming-equivalent sales).
Drake came second, with 965,000 copies sold of his fourth album 'If You're Reading This It's Too Late'. The top 10 also included Sam Smith and Ed Sheeran, as well as the Fifty Shades of Grey soundtrack.