Warner Music Latest Major Label to Make More from Streaming Than from Sales

Streaming doesn’t pay? Tell that the three major labels.

Warner Music, like their peers, is having a good run, posting a 13.3% increase in revenue year-over-year. Where did that increase come from? Not from downloads, which are -27.3% lower than last year. Not from physical sales like CDs and vinyl. That dropped by 8.4% and now make up just 21.2% of the pie.

No, all that extra money came from streaming. It’s up 58.8% over last year, which translates in a jump from $227 million to $360 million. Taken with all the other formats, streaming accounts for 46.8% of all revenue.

Look at that number again: Streaming provided nearly HALF the revenue for Warner. All the other labels are seeing revenue numbers approaching that.

If this doesn’t convince you that streaming is going to win, nothing will. Sure, there are problems–artist payouts suck and need to be addressed–but you can tell which way the wind is blowing. And it’s approaching a category 5 hurricane.

As Bob Lefsetz says in his newsletter, “Consumption rules. It’s about listening as opposed to selling. You’ve got to make music people want to listen to.”

A couple of things:

  • Whither iTunes? Apple’s gotta make Apple Music more appealing to more people. And fast.
  • Whither Spotify? It’s insanely popular, but it’s losing hundreds of millions of dollars every year because of the licensing agreements forced on them by labels and rightsholders. The recording industry wants to keep their collective boot on Spotify’s throat because they remember how Apple took control of the music with iTunes. That ain’t gonna happen again.
  • What’s the future of the album? So few album tracks get streamed that is it even worthwhile recording them?

Ignore everything at your own peril.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

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