Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here’s What That Means For You

Matt Bacon March 24, 2016 Comments Off on Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here’s What That Means For You
Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here’s What That Means For You
Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here's What That Means For You

“Well, this is interesting” I thought as I quietly skimmed through the sure to be controversial Digital Music News article. Vinyl sales have outpaced sales from ad based streaming. This is frankly kind of amazing. I mean – it should be a little obvious too, but it’s an interesting result from the RIAA announcing their sales for 2015 and I think it gives us a lot of stuff to unpack. It leaves us with a lot of lessons about the state of the music industry today and has me wondering where this whole ad based streaming thing is going to have to go next, especially now that people become increasingly aware of how close to piracy it actually is.

There’s a couple of points that need to be made right off the bat though about data manipulation. Primarily – it needs to be emphasized that we are talking purely about the revenue from free streaming, paid streaming systems actually dominated both vinyl and ad based streaming. Furthermore, the gap between vinyl and ad based streaming is probably a far sight greater than reported by the RIAA because not all vinyl sales go through them. For example – pretty much every vinyl you buy at a show is not going to be registered unless you are buying from a major band. That creates a rather impressive additional revenue. Furthermore, pretty much every signed artist (and many unsigned ones) have ad based streaming – bands with vinyl are a MUCH smaller segment of the music selling population. In other words – the gap is bigger than even the RIAA might suggest.

What this means though is important. Vinyl are usually sold around $20-25 and the sales of only 17 million has managed to outstrip a service that is nearly ubiquitous these days. I think that tells us a lot about where the music industry is. 17 million sales? There were individual ALBUMS in the 80s that did better than that. I’m not trying to be an old fart bellyaching about the state of the industry, but I think it’s important to think about the implications of that particular statistic. Def Leppard actually have two records that have cleared the 10 million sales mark. Think about that. Sure, the vinyl resurgence is real, and actually a really good thing for everyone because of the higher margins involved, but if a mere 17 million sales can outpace all of ad based streaming, then maybe we need to reconsider how ad based streaming is supposed to work.

We’ve discussed before on this blog how the entire streaming industry is messed up and how the larger the audience the more it costs streaming services, the majority of whom, it bears mentioning, are still in the red. The vast majority of artists income streams is from paid users and I think an argument could be made that piracy actually helped individual artists more than ad based streaming ever will. At least piracy, in its heyday was ubiquitous and could be directly tied to increased merchandise sales. Ad based streaming is almost more insidious because even though it essentially boils down to the same thing, people still seem to think that it’s morally justified.

Don’t get me wrong – I think a based streaming is great, I prefer to piracy by a longshot. I just think we all need to remember the long term implications that ad based streaming can have. It’s not a super sustainable model and it isn’t going to get any better until the laws change, and we all know how slow Congress can move. Ad based streaming is only a stop gap and until we can either move more people to paying for streaming or find another solution entirely then margins are going to continue to diminish in the music industry. It’s a brutal reality that so many of us (Myself included) just want to use Spotify to ignore.

Statistical variance and accusations of piracy aside, I think it’s also important to realize that, holy crap you guys, vinyl is actually a thing again, and not only that, it’s a very important part of the modern industry. Things look like they are only going to be getting better for vinyl too. From what I understand audiophiles complaining about vinyl not having enough low end will very soon be sated by high tech vinyl that has even better audio quality, on par with its peers in the world of FLAC and similar high quality audio files. This will help win over the last of the naysayers and increase the gap we are already seeing as ad based streaming revenues decrease and there becomes less of an excuse than ever not to buy vinyl.

Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here's What That Means For You

Nevertheless – everyone’s salary is down and the new industry is going to take a lot of time to get used to. Streaming was a part of the solution, and it’s strangely comforting to see a shadow from the past coming up to be another key aspect to our future. We need to take vinyl sales into consideration, realize the accessibility costs and then manipulate it into something greater. There’s a lot of potential out there by combining these services and emphasizing the importance of helping artists. We are on the way to changing the world – we just need to take these weird little twists and turns in stride.

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Vinyl Sales Surpassed Revenue From Ad Based Streaming: Here's What That Means For You

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