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As Song Sales Slump, Streaming Booms

Blame the Harlem Shake.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Digital music downloads are down. Music streaming is up.

Connected? That’s a big debate within the music industry right now, and the truth is that there probably isn’t a straightforward answer. But it’s reasonable to conclude that at least some of the drop in sales comes as people are increasingly relying on services that serve up what are essentially unlimited streams of music, like YouTube, Pandora and Spotify.

For now, we can at least agree on some basic facts:

Digital music sales decreased last year. Individual track sales were down around six percent in the U.S. Sales of digital albums — Beyonce included — were flat, according to Nielsen Soundscan. That’s the first time digital download sales have decreased.

Digital music streaming increased last year. Nielsen says listeners streamed 118 billion songs last year — up 32 percent from 2012. Those numbers significantly undercount the total impact of streaming, since they don’t count some Web radio services, most notably Pandora, whose users listened to 1.58 billion hours of stuff in December alone.

The real question for the music business — and people who make music — is whether the money they’re getting from the streaming services is making up for the drop in downloads. We might get a slightly better sense of that in the nearish future, when industry trade groups plan to release numbers on the streaming market, but again — it’s going to be murky.

For the record, here’s the most popular digital download of the year. Alan Thicke’s son, with a lot of help from Pharrell (and maybe Marvin Gaye), sold 6.5 million copies of this one:

And here’s the most popular stream. Remember the Harlem Shake? From less than a year ago? 489,674,000 streams:

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