On-demand audio streams beat digital sales for the first time in history

According to a new year-end report released by Nielsen, over the course of 2016, streaming became the primary mode of music consumption in the U.S.

Overall on-demand audio streams surpassed 251 billion in 2016–a 76 percent increase that accounts for 38 percent of the entire music consumption market. Plus, “the on-demand audio streaming share [of total music consumption] has now surpassed total digital sales (digital albums + digital track equivalents) for the first time in history.”

The growth in streaming was more than enough to offset declines in other formats, particularly digital sales, leading to an overall 3 percent increase in music consumption compared with 2015, the report said.

“The music industry continues to grow at a healthy rate, and 2016 showed us that the landscape is evolving even more quickly than we have seen with other format shifts,” said David Bakula, senior vice president of industry insights at Nielsen Music.

Part of streaming’s increased success, Nielsen finds, is that it’s the preferred platform for hip-hop and R&B fans. The genres make up 22 percent of all audio consumption, but 28 percent of on-demand streams. Rock, in contrast, is the most popular genre in general, with 29 percent of consumption, but accounts for only 20 percent of the streaming market.

Hip-hop’s streaming success, of course, comes from popular albums by Drake, Rihanna, Kanye West, the Weeknd, J. Cole, and more. Drake placed as Nielsen’s top artist of 2016, earning over 5.4 billion on-demand audio streams. “View” the most consumed album of 2016 — had over 3 billion streams. The No. 2 album, Adele’s 25 — had only 457 million streams but outperformed in sales with 1.731 million, including 58,000 on vinyl (the third most in 2016 – behind Twenty One Pilots and David Bowie).

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