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US music industry is making money again. Thanks, Spotify (and Apple)

The widening popularity of $10-a-month music subscriptions like Spotify and Apple Music is lifting the US recording industry to its best growth since the 1990s.

Growth in subscription music services is lifting the US recording industry to its best growth since the late '90s.
Oscar Gutiérrez/CNET

The US music industry no longer needs life support.

US sales from streaming music were up 8.1 percent to $3.4 billion in the first six months of 2016 compared with the same period last year, a music industry trade group said Tuesday. In the first half of 2015, revenue was down 0.5 percent.

This shift marks the best growth since the late 1990s, according to a Recording Industry Association of America report (pdf).

Consumers have been moving away from buying music outright to paying for tunes with an all-you-can-eat subscriptions. Those $10 monthly memberships -- from the likes of Spotify, Apple Music and Tidal -- have reached enough scale to drive the recording industry's best growth since the height of the CD. The first half of 2016 averaged more than 18.3 million music subscriptions, doubling the 9.1 million reported at the same time last year, the group said.

Subscription music had already offered glimmers of hope that the model could pay off. For all of 2015, US music sales rose 0.9 percent year over year, with streaming revenue eclipsing that of downloads for the first time.

But in the first half of this year, total streaming revenue was nearly half of the music industry's total take. Sales from streamed music comprised 47 percent of the industry's total, which included subscriptions, online radio like Pandora and ad-supported operations like Vevo, YouTube and free versions of Spotify with commercials.

Digital downloads, the music purchases typified by Apple's iTunes Store, sank 17 percent to $1 billion in sales in the first half of 2016.