2014 statistics for the music business are unsurprising – album sales sunk 11 percent to 257 million units, track sales dropped 12.5 percent to 1.1 billion… On-demand streaming went up 54 percent to 164 billion songs.
Billboard offers an alternate interpretation of the continued discrepancy, “That [streaming] increase of 57.5 billion tracks is equivalent to an increase in album sales of 56.1 million units — a number that exceeds the decline in track-equivalent albums (or TEA, a combination of album and track sales) of 47.9 million units.”
Will this translate to enough increased revenue from streaming to offset the physical sales decline? Record companies might be closer to breaking even than we might expect this year.
On the other hand is the streaming companies business. A new report from Strategy Analytics highlights the particular challenge streaming-only businesses have as they grow:
Most companies benefit from economies of scale; however, Pandora and Spotify’s content acquisition costs increase in parallel with subscriber growth, preventing them from getting ahead of the cost curve.
2015 might be a turning point for streaming-only businesses vs. tech giants that are offering streaming music also.