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Taylor Swift sold 1.287 million albums last week. But the future of music is streaming.

Taylor Swift on the Red tour.
Taylor Swift on the Red tour.

Taylor Swift sold 1.287 million copies of her new album 1989 in a single week.

That makes 1989 the second-highest selling album of 2014, behind the Frozen soundtrack. What that number doesn't do, though, is reflect the future reality of the music industry. Taylor Swift is a masterful pop star and an even more talented businesswoman. Selling 1.287 million albums last week is great for her, but it isn't her end game, and it shouldn't be the music industry's either. 1989's success notwithstanding, the importance of album sales will rapidly diminish in the future of the music business.

One million albums is a ton, especially in 2014

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Taylor Swift performs live in April, 2013 (Ethan Miller/Getty)

One of the biggest questions heading into Taylor Swift's fifth studio album was how well it would sell. 1989 came out in a year when album sales on the whole are down 14 percent. The market has been so bad this year for music that before Swift's album dropped, industry analysts predicted it would only sell 700,000 copies — that's 500,000 less than Swift's last album Red sold.

Despite the grim forecast, 1989 was hyped up for months with single releases, Swift appearing on radio and television shows, and the announcement of a special Target edition of the album that included Polaroids and three bonus tracks.

The hype paid off. That Target edition, according to the Nielsen Soundscan ratings, sold 470,000 copies. On just those sales alone, 1989 beat the 383,000 copies that Coldplay's Ghost Stories sold in its first week. Ghost Stories had the highest debut week numbers for 2014 until this week. In total sales, 1989 fell just shy of the 1.319 million copies Britney Spears sold of Oops! ... I Did It Again in 2000, the most ever by a female act. That week, Oops! accounted for 8 percent of total album sales. Swift's 2012 Red was 22 percent of total album sales that week. 1989 also accounted for 22 percent of album sales for the week. So not only did Swift sell a metric ton of albums, she dominated the market.

Selling 1.287 million albums is no small task. Only 18 albums before this one had ever sold one million albums in a single week. 1989 is Swift's third album to go platinum immediately, which makes her the only artist ever to have three albums sell a million copies in their first week.

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Instant Million albums (graphic by Tyson Whiting)

Most importantly, 1989 is the highest-selling first week for any artist in 12 years since Eminem's The Eminem Show debuted with 1.322 million in its first full week. This fact is important because it highlights how much the music industry has changed in the past decade and a half. When Eminem released his album, 98.2 percent of music industry revenue came from CD sales. In 2013, CDs made up just over 30 percent. Today we have Spotify and Rdio and Pandora. We have instant downloads and phones that store our music. The world is a drastically different different place than it was in 2002, and that's what makes 1989 such an incredible feat.

This doesn't mean that albums are saved

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Taylor Swift on the top of the Empire State Building. (Dimitrios Kambouris/LP5/Getty Images for TAS)

On November3, Swift pulled all of her previous albums from Spotify and declared that streaming is not good for artists. On Thursday, she pulled her songs from Rdio. Swift has especially been an opponent of free music services, writing this in an op-ed for the Wall Street Journal earlier this year:

It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is hope they don't underestimate themselves or undervalue their art.

Taylor Swift is very, very wrong about the future of streaming.

Just because Taylor Swift, arguably the biggest pop star in the world, can sell one million copies in a single week does not mean that people want to or even will buy albums. Album sales are not the future of music: streaming is.

According to a report from the RIAA, streaming services contributed 27 percent of total industry revenues in the first half of 2014. That's up seven percent from last year. That percentage has been steadily moving upward since the early 2000s and shows no signs of stopping. The report also said that the growth in revenues from streaming services offset the entire decline in revenues from permanent downloads for the first half of 2014. The way the music industry is making money is changing so rapidly that the distribution of revenue looks completely different than it did the year Swift was born, and even the year she released her first album.

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Revenue in the music industry broken down by year (Digital Music News)

Album sales (both permanent downloads and physical album sales) accounted for 69 percent of music revenue in the first half of 2014, but that's a huge drop from the first half of 2013. Album sales are down 14 percent, and streaming made up almost the same percent of sales as physical album purchases. Streaming and vinyl records are the only portion of the music industry that has seen financial growth in the past five years.

Swift has a lot of fans, but she doesn't have as many as Spotify has. 1989 sold more than a million copies, but Spotify has 40 million users, 10 million of whom pay for a subscription.  Her game is here and now. She will dominate the news cycle for the next few months, and then dominate it again in two years when she releases another studio album. But Taylor Swift cannot change the direction that the music industry is headed whether or not she pulls out of every streaming deal in existence. Streaming will outlast her.

Taylor Swift is a huge star, but for how long?

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Taylor Swift at the 2009 AMC Awards show. (Ethan Miller/ACMA/Getty Images for ACMA)

Taylor Swift will make a lot of money off of 1989, but she is not an artist who makes her living off of music sales. She makes the majority of her money off of her advertising deals with Diet Coke and Target, and her concert ticket and merchandise sales. It's estimated that Swift brought in almost $40 million dollars in 2013, a year when she didn't even release a new album. Like most artists, her album is the vehicle by which she finds and keeps fans, but it isn't her primary source of income.

Once upon a time, there was another star who was just as famous as Taylor Swift and just as beloved. Celine Dion sold 175 million albums worldwide. She was a massive pop star, just like Swift.  But Celine Dion doesn't make her money off of album sales anymore. She makes her money off of performances, and streaming. Her Vegas show made $11.8 million dollars in 2013, by far the highest percent of her income. At this point, her royalties are negligible and her best albums behind her. She made three times as much money last year from streaming as she did on album sales. The same can't be said for Swift at this point, but one day that will be true for her, too.

And when she ages and fades from glory, album sales won't be there to save her. They won't be there for any artist. But streaming will be. Today, Celine Dion is one of the most highly-streamed artists, according to Pandora, and one day Taylor Swift will be, too.

Album sales are the story of this moment, just as Taylor Swift is, but streaming is the story of the future of music, for us and for Taylor Swift.

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