(RNN) – The Internet nearly killed the music industry a few decades back, but online streaming could be nursing it back to health.
Recorded music sales in the U.S. increased by 16.5 percent last year, continuing an increase in sales seen the previous year, according to a new report from the Recording Industry Association of America, a trade group.
Streaming platforms like Pandora, Spotify, YouTube and Vevo accounted for almost two-thirds of the $8.7 billion in U.S. music industry revenues last year.
The platforms accounted for nearly all industry growth, with paid subscriptions to those platforms being the biggest driver of that growth, according to the RIAA. Paid music subscriptions also drove most of the growth in 2016.
It’s not since 1999 that U.S. music revenues have grown for two years in a row, even if those revenues are 40 percent below what they were that year, the report said.
Meanwhile, revenues from digital downloads dropped nearly a quarter last year.
The report also shows that for the first time since 2011, revenues from physical products exceeded revenues from downloads.
Overall, shipments of physical products like vinyl records and CDs dropped last year – but only by 4 percent. Within that category, shipments of CDs declined by 6 percent, while revenues from vinyl records actually grew by 10 percent.
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