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Streaming continues to supplant music sales: Nielsen mid-year report

Nielsen Soundscan‘s annual mid-year report, issued each June, shows the first half of 2014 continuing a definitive consumer migration from purchasing albums to streaming songs.

In January we reported the first-ever year-over-year decline of album and track downloads in 2013, noting it as an epochal change. The new era is characterized by rising consumer demand for accessing music (streaming) instead of purchasing and storing music (owning). The access-vs.-owning fulcrum is widely regarded as a hinge point that is disrupting the music industry.

In the first half of 2014, CD sales continued a plummeting trend, skidding 20% from the front half of 2013. Album downloads dropped 12%. (Digital singles lost ground by 13%.)

Meanwhile, streaming (audio and music-video) increased 42% year-over-year, to 70-billion accessed streams.

 

nielsen mid-year 2014 albums vs streams edit

Chart by RAIN News. Source: Nielsen Soundscan mid-year music industry report

 

When audio on-demand streams are carved out of total streams (which include video music streams), the year-over-year rise in consumption is even more dramatic: Audio streaming rose by slightly over 50% in the first half of 2014.

Nielsen also measures “track equivalent” albums — a construct that divides total consumption of singles by 10 to indicate overall consumer demand for music as album units. Through that lens, when streaming is eliminated, “album” sales dropped 14.3%. When streamed tracks are added to the formula, the drop is just 3.3%. [Update: a RAIN reader pointed out that Nielsen used a different formula for "streaming track equivalent" albums in 2013 from the 2014 formula. In 2013, the formula called for 2,000 streaming tracks to equal an album; in 2014 it is 1,500 streaming tracks per album. If the 2,000-to-1 formula were used across both years, the decline of album sales would be higher. Thanks to Daniel AJ for the note.]

The main takeaway from Nielsen’s mid-year report is that the trend toward streaming appears to be accelerating. In January, Nielsen’s full-year report of 2013 indicated 32% growth in streaming compared to 2012. In 2014, the year-over-year pace is +42% rise in streaming at the year’s midpoint.

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