RIAA: Highest artist rates come from Apple Music as music industry slowly rebounds

The Recording Industry Association of America is out today with an overview of the performance of the music industry during 2016. As detailed in a blog post, the music industry saw revenue of $7.7 billion during 2016, up 11.4 percent compared to the year before.

Perhaps most notably, the report states that streaming music revenue from Apple Music, Spotify, Pandora, and YouTube made up the majority of that revenue for the first time ever.

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The RIAA data shows that streaming music services accounted for 51.4 percent of revenue during 2016. This marks the first time that streaming services have accounted for the majority of revenue in the music industry. More specifically, streaming services brought in $3.6 billion in revenue, up 68 percent year-over-year.

2016 overall represented a strong year for the music industry. Showing 11.4 percent growth year-over-year, the music industry saw the biggest increase in revenue since 1998 when CDs were the primary source of revenue. At that time, six times more CDs were sold than today.

In the grand scheme of things, however, the music industry is still significantly smaller than it once was. The RIAA notes that revenues are half of what they were in 1999, during the CD-driven era.

Although our 2016 revenue report catalogues substantial overall improvement for the industry, revenues are still only about half what they were in 1999, and revenues from more traditional unit-based sales (physical products and digital downloads) continued to decline significantly.

The latest RIAA report shares positive news as far as Apple is concerned. In terms of payments to music creators per 1,000 streams, Apple comes out well ahead of Spotify and YouTube. Apple pays between $12 and $15 per 1,000 streams, whereas Spotify pays around $7 per 1,000 streams, and YouTube pays around $1. The RIAA notes that what’s really hindering the music industry from growth is the low payouts from services like YouTube, which uses a “legal loophole” to pay such a low rate:

The unfortunate reality is that we have achieved this modest success in spiteof our current music licensing and copyright laws, not because of them. That’s not the way it should be. For example, it makes no sense that it takes a thousand on-demand streams of a song for creators to earn $1 on YouTube, while services like Apple and Spotify pay creators $7 or more for those same streams.

Why does this happen? Because a platform like YouTube wrongly exploits legal loopholes to pay creators at rates well below the true value of music while other digital services — including many new and small innovators — cannot.

The latest RIAA report comes after a separate analytics firm claimed that Apple Music has by far the largest user base thanks to the three-month free trial. Coupled with the RIAA report, Apple Music increasingly looks like the best option for artists when it comes to streaming music services.

The full RIAA report is available here.

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Avatar for Chance Miller Chance Miller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

Tips, questions, typos to chance@9to5mac.com