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RIAA Report Reveals Vinyl As More Valuable Than Ad-Supported Streaming

29 September 2015 | 2:48 pm | Staff Writer

The result is one of very few surprises amid the US industry body's mid-year findings

The global music business is undeniably in a period of perpetual change — no sooner does one trend appear to emerge than another usurps it — and, despite new digital formats matching physical revenue for the first time ever earlier this year (and consequently leaving it in the dust), the industry still finds way to pull a surprise or two out of its hat.

Take, for example, a new report by the Recording Industry Association Of America (RIAA), which has found that the humble vintage format of vinyl is, in 2015, actually more valuable as a market than ad-supported (i.e. free) online streaming.

As The Verge reports, vinyl music sales brought in almost $US60 million (about $86.2 million) more than ad-backed streaming over the first six months of 2015, raking in $US221.8 million — or about a 52% increase year-on-year — between January and June, while ad-supported/free streaming, such as on YouTube, Vevo and Spotify's entry package, brought in $162.7 million, or a 27% rise year-on-year.

"The data continues to reflect the story of a business undergoing an enormous transition," RIAA chairman and chief executive Cary Sherman told The Verge.

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"The product of music and the extraordinary roster of artists represented by today's music labels remains in high demand … at the same time, intense demand and billions of streams does not always equal fair market rates or a fair playing field."

That said, the wider breakdown of music-industry revenue "now consists of three near-equal parts", namely physical, streaming and permanent downloads, the last of which is now the biggest slice of the market, accounting for about 40% of total revenue across the board. However, with streaming on the upswing — it too now eclipses physical sales and is on the way to start eating into some of that sweet downloads pie — the present make-up is unlikely to last too long.

Additionally, the present dominant value of vinyl — regardless of how fleeting or otherwise it may turn out to be — is not the only milemarker to be found in the RIAA's new report, however; as The Verge notes, digital streaming — that is, not just ad-supported services but digital radio and subscription services too — brought in more than $1 billion over the six months to June this year, the first time such a result has been achieved. It really is an online world; we're just living in it.