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Streaming Just Made More Money Than CDs For The First Time Ever

Kendrick Lamar: breaking records, taking names. CREDIT: ARTHUR MOLA/INVISION/AP
Kendrick Lamar: breaking records, taking names. CREDIT: ARTHUR MOLA/INVISION/AP

I saw music future and its name is streaming services: in 2014, for the first time in the history of the music industry, streaming services earned more revenue than CD sales.

According to a new report from the RIAA, streaming pulled in $1.87 billion in sales, compared to CD sales total of $1.85 billion. Not exactly the widest margin of victory there, but the direction of the industry is clear. Streaming rose by 29 percent in the last year alone. Permanent downloads are still the largest piece of the pie, constituting 37 percent of total market by value, but that’s down from 40 percent in 2013. Physical shipment revenues, unsurprisingly, dropped three percent as well, down to 32 percent.

The only source to grow in 2014? Streaming. The number of paid subscriptions to on-demand music services (your Spotify-style offerings) has increased more than threefold in the past three years. As revenues from permanent digital downloads are falling — e.g. purchasing a song on iTunes to save in that library of yours forevermore — streaming revenues are rising.

As for 2015, Spotify records have been smashed twice since this new year began: Drake’s If You’re Reading This It’s Too Late and Kendrick Lamar’s To Pimp a Butterfly. Lamar’s album had a record 9.6 million streams on the day of its release; the next day, Lamar set a new record when To Pimp a Butterfly was streamed 9.8 million times. The major complaint about streaming services has always been that artists don’t get a big enough cut of the cash, but Lamar reportedly made about $1 million in 24 hours.

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To reference a CD that this reporter bought in the dark ages before streaming, the writing’s on the wall: CDs are the past, streaming is the future.

Both Drake and Lamar released their albums, Beyoncé-style, with no notice. Considering how leaks are likelier than ever, are release dates obsolete? Maybe! Who needs release dates, honestly?

The music industry seems to be trending in the opposite direction of the movie industry, where Marvel and its ilk like to stake out dates on the calendar several years in advance just to get comic book audiences salivating about the upcoming Avengers flicks for more than fifty months. Movies are turning to an ever-elongated anticipation machine: before the movie comes the trailer, before the trailer comes the teaser for the trailer, before the teaser for the trailer comes the poster reveal, before the poster reveal comes the first look of the actor in costume, before the first look… you get the idea.

But musicians are letting the songs build their own buzz. To be fair, the surprise-drop is a more feasible model for music: it’s easier to just stream a song on Spotify and decide you can’t get enough of it than it is to commit a Friday or Saturday night to a $14 viewing experience you might not even like.

You probably remember Taylor Swift, Wall Street Journal finance reporter, making the case against streaming in an op-ed last summer and pulling her entire catalog from Spotify a few months later. As she told TIME:

I think there should be an inherent value placed on art. I didn’t see that happening, perception-wise, when I put my music on Spotify. Everybody’s complaining about how music sales are shrinking, but nobody’s changing the way they’re doing things. They keep running towards streaming, which is, for the most part, what has been shrinking the numbers of paid album sales… I think that people should feel that there is a value to what musicians have created, and that’s that.

Swift, though, is an outlier in every quantifiable way. That she could release 1989 and pull all her music from the Spotify shelves says everything about her extraordinary power to move product and next to nothing about what other musicians would benefit from doing. Swift had the luck of arriving on the scene when teenagers were still more likely to shell out for a physical CD than to wait for dial-up internet to connect them to Kazaa in the hopes of hearing a 30 second clip of a song. Her fans, loyal as Griffyndors, aren’t going to jump ship now; were she a 15 year old phenom breaking out in Nashville tomorrow, she would likely not have the luxury of sitting out the streaming revolution.

Swift has yet to amend her Spotify policy, but maybe she’ll change her mind. She is, apparently, a Lamar superfan: