Pandora’s box is open: Streaming revenue edges out CDs in U.S. for first time

Streaming has topped CD sales in revenue for the first time in the United States as music listeners flock to on-demand services and Internet radio, industry figures showed. Data for 2014 showed a major shift to streaming as opposed to physical sales and permanent downloads, with rapid growth both for on-demand services such as Spotify and Rhapsody and Internet radio providers such as Pandora. Streaming revenue totaled $1.87 billion, edging out the $1.85 billion earned by CD sales, according to data of the Recording Industry Association of America.

The industry continues to rapidly grow the share of revenues coming outside of traditional unit-based sales.

the Recording Industry Association of America said in a report

Whatever the bottom line, the growth of streaming has been controversial with numerous stars complaining that the revenue sent back to artists is paltry. Spotify has hit back by describing itself as a rare source of growth in the music industry and has said it has distributed $2 billion back to artists over the past seven years. Some of the strongest growth in the industry was in vinyl, which has enjoyed a resurgence in recent years among collectors. Despite the sharp growth of streaming, permanent digital downloads on services such as iTunes remained the largest overall category for revenue.