Christian P. Pewitt Blogs: Recorded Music Industry Grew 12.5% In 2017 As Streaming Soared and R&B/Hip-Hop Surpassed Rock

Nielsen Music's 2017 U.S. Year-End Report confirms continued growth in recorded music driven by streaming. Total volume was up 12.5% over 2016, fueled by a 59% increase in on-demand audio streams compared to last year. For the first time, R&B/Hip-Hop surpassed Rock to become the largest genre in terms of total music consumption.

On-demand music streams surpassed 400 billion 2017, up from 252 billion in 2016, and overall on-demand streams including video exceeded 618 billion, according to Nielsen Music. 2017 also saw another year of sales decreases in nearly all formats, particularly digital album and track sales. But explosive growth in streaming easily off-set the declines, resulting in positive growth overall.

“The music industry saw solid growth this past year, largely supported by the increased accessibility of music and a diversity of channels for music discovery,” said Erin Crawford, SVP Nielsen Entertainment, General Manager Nielsen Music. “Consumers are continuing to engage with music at unprecedented levels and streaming services are proving to be a key catalyst in increased consumer demand. The music industry has never been more dynamic than it is today and we look forward to delivering insights that drive new opportunities in the year ahead.”

Ed, Kendrick and Taylor

Ed Sheeran’s album Divide was the leader in total volume (Albums + Track Equivalent Albums + On-Demand Audio Streaming Equivalent Albums) this year, followed by Kendrick Lamar’s DAMN. and Taylor Swift’s Reputation. Led by eight of the top ten most-consumed albums of the year, R&B/Hip-Hop surpassed Rock as the dominant genre in the U.S. for the first time ever, based on total Volume (Album Sales + Track Equivalent Albums + On-Demand Audio/Video Streaming Equivalent Albums). Kendrick Lamar’s DAMN. was the top consumed album for the R&B/Hip-Hop genre in 2017, with Drake’s More Lifeand Bruno Mars’ 24K Magic rounding out the top three. The growth of R&B/Hip-Hop was powered by a 72% increase in On-Demand Audio streaming.

The biggest song of the year, in terms of total activity (Song Sales + On-Demand Audio Streaming Equivalent Songs), was “Despacito” by Luis Fonsi & Daddy Yankee (ft. Justin Bieber), followed by Ed Sheeran’s “Shape of You” and “Humble.” by Kendrick Lamar. “Despacito” also led the Digital Song Sales chart, with “Shape of You” at No.2 followed by Sam Hunt’s “Body Like a Back Road” at No. 3.

Vinyl Continues To Grow

Vinyl LP sales, which reached an all-time Nielsen Music-era high volume of 14.3M units, increased for the 12th consecutive year in 2017. The top-selling vinyl LP of the year was the The Beatles’ Sgt. Pepper’s Lonely Hearts Club Band, powered largely by its deluxe anniversary reissue. It was followed by The Beatles’ Abbey Road and the cinematic soundtrack, Guardians of The Galaxy: Awesome Mix Vol. 1, which was also released in cassette format, finishing the year as the third-best selling album on cassette. The soundtrack for the sequel film, Guardian of The Galaxy Vol. 2: Awesome Mix Vol. 2, topped cassette sales in 2017 and led to the highest measured sales volume for the cassette format since 2012.

Highlights:

On-Demand Audio streaming has grown to 54% of total Audio consumption (Albums + Track Equivalents + On-Demand Audio streaming Equivalents), comprising the majority of audio consumption for the first time. On-Demand Audio streaming was 38% of total Audio consumption in 2016 and 22% in 2015.
The On-Demand Audio streaming share has now surpassed all “ownership” formats (Physical and Digital Album Sales + Digital Track Equivalents) for the first time in history.
Despite the continued significant decline in Digital Album and Track purchasing, Total Digital Volume surged by 20.5% this year thanks to a 43% growth in On-Demand streaming.
Driven by its popularity among streaming consumers (On-Demand Audio streaming), R&B/Hip-Hop has surpassed Rock to become the largest genre in terms of total consumption (Album + Track Equivalents + On-Demand Audio Streaming Equivalents).
Total volume was once again led by R&B/Hip-Hop artists, with 8 of the top 10 highest volume artists (Album + Track Equivalents + On-Demand Audio Stream Equivalents). Drake led the way again this year with 4.8M in Total Equivalents, followed by Kendrick Lamar (3.7M). Ed Sheeran (3.6M) and Taylor Swift (3.4M), both representing the Pop genre, came in at No. 3 and No. 4 respectively.
In 2017, there were 19 songs that reached 500M in On-Demand streams for the year, compared to just six songs to reach that milestone in 2016. 17 of the 19 songs to reach 500M On-Demand streams in 2017 came from the R&B/Hip-Hop genre.
Streaming in 2017 was led by the smash hit, “Despacito” by Luis Fonsi & Daddy Yankee featuring Justin Bieber, with over 1.3 Billion On-Demand streams (Audio/Video).
10 Songs surpassed 400M On-Demand Audio streams in 2017, compared to just one title to reach that level in 2016. 10 Songs also surpassed 300M in On-Demand Video streams in 2017, compared to just two in 2016.
Purchasing continues to decline with Album + TEA sales posting a 19% decrease against 2016. This number is lower due to sharp declines in digital purchases.
For the second straight year, Physical Albums were a larger share of Total Album sales than the prior year. Physical Albums are now 61% of all Albums sold, up from the 2015 low of 58%.Vinyl LP sales were up 9% vs. 2016 and have now grown to 14% of Total Physical Album sales. This marks twelve straight years of year-over-year increases for Vinyl LPs, reaching a record sales level in the Nielsen Music era (since 1991) with over 14.3 million sales this year.
Rock continues to be the largest genre for Album sales with 35% of Total Albums and 37% of Physical Albums coming from this genre. However, Rock’s share of On-Demand Audio streaming is only 17%, well behind R&B/Hip-Hop’s 30% share of the format.
R&B/Hip-Hop and Latin were the major genres with the biggest growth vs. 2016, with Latin up 30% in Total Volume (Album + TEA + On-Demand SEA) and R&B/Hip-Hop growing by 25%.
Taylor Swift’s Reputation debuted with the 10th highest first-week Album sales total in Nielsen Music history when she moved over 1.2M Albums. It was Taylor’s fourth straight debut week selling over 1M Albums, which is the most ever by an artist. Reputation went on to sell 1.9M albums in 2017 and was one of only two albums (joining Ed Sheeran’s Divide) to surpass 1M album sales in 2017.10 Albums surpassed 500K sales in 2017, compared to 13 to reach that mark in 2016.