Streaming Music Revenue Makes Big Increase, CD Sales Fall Again

Nielsen SoundScan has released its mid-year report of digital music sales, and music streaming has made a huge leap in the past 12 months. In the middle of 2014, streaming has nearly doubled over last year, though there is a different way of calculating streaming.

The music industry uses “stream equivalent albums” (SEAs) when making calculations. An SEA was the equivalent of 2,000 streams last year, and this was based on the number of streams needed to equal the average wholesale price of an album, $7.50. Last year’s blended per-stream rate was approximately $0.00375, and this year it is around $0.005, so it takes only 1,500 streams to make up an SEA.

So, in the first half of 2014, there were 46.9 million SEAs, compared to 24.8 million last year; but that represents a 41% increase in the number of tracks streamed, not the nearly 100% increase in SEAs. Nevertheless, that’s a huge increase, showing that streaming music is gaining a foothold in the US music market.

Total album sales were down at 227 million, compared with 235 million in the previous year; not a huge decline (about 3.5%); this includes whole albums, track equivalent albums (ten tracks count as an album), and SEAs. Digital album sales, however (including track equivalent albums; which counts ten songs as an album), are down sharply, at 113.2 million, compared to 129.1 million last year.

So overall, in spite of a sharp rise in streaming, digital music sales are down. As music becomes more ubiquitous, the music industry is still struggling to keep they coffers full, and streaming hasn’t yet compensated for the loss in sales. However, at this rate, it could do so soon, especially if streaming music rates were to increase again.