On-demand music streaming has gone up over 42% in the last year

Digital music consumption is rapidly shifting from downloads to the streaming model popularized by the likes of Spotify and Pandora. According to Nielsen’s U.S. music report on the first half of 2014, digital album sales are down 11.6%, while purchases of individual tracks are down 13% from last year. On-demand streaming audio, on the other hand, is up a healthy 50.1% for the period. Putting that in hard numbers, Nielsen says 120.9 million albums have been sold so far this year, down from 142 million in the first half of 2013. Of those albums, 62.9 million were on CD and 53.8 million were digital downloads. On-demand streaming is measured in number of plays, which reached 33.6 billion during the period. Based on revenue collected from sales and streams, one album sale is equivalent to about 1,500 song streams, which in turn Nielsen translates to a 3.3% decline overall in music sales for 1H 2014.

Nielsen’s U.S. music report on the first half of 2014 shows digital music consumption rapidly shifting from downloads to streaming. On-demand streaming was up 42% over the first half of 2013, racking up 70 billion play in the first half of 2014. Meanwhile, digital track sales fell 13% to 593.6 million and album sales fell 11.6% to 53.8 million. The report on US trends (not international) makes Apple’s acquisition of Beats looks smart, as its iTunes download sales model is quickly dying out. As a whole, dismal digital and physical sales dragged total music sales plus streaming industry down 3.3%. Back in the analog world, hipsters are making a serious impact as vinyl sales rose 40% over 2013 to 4 million in the first half of this year. That’s the only medium where sales grew. While YouTube’s music videos have been strong provider of music streaming for years, the rise of apps like Spotify is pushing on-demand audio music streaming to grow faster (+50%) than video (+35%). The two are now nearly the same size, as 33.65 billion songs were streamed in the first half of 2014, compared to 36.64 billion music video streams. At this rate, pure audio streaming will overcome music video streaming in the U.S. by the end of 2014. Internationally, where many of the top streaming apps aren’t always available, YouTube is probably still a bigger chunk of consumption.