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Streaming is the king of music now, Nielsen says too

On-demand streaming grew to 38 percent of total listening last year, making it the biggest format and taking it past digital sales for the first time.

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Streaming became the top format for music listening last year, Nielsen reported.
Sarah Tew/CNET

Streaming services surged last year, overtaking digital sales of music for the first time in the US, Nielsen Music said Thursday.

It's the latest evidence that consumers have quickly shifted away from the digital downloads typified by Apple's iTunes to streaming music alternatives. The change has made subscriptions the music industry's dominant sales model (the US recording industry's main trade group reported this inflection occurred in 2015), and it has lifted revenue for recorded music to its best growth since the era of the CD.

"2016 showed us that the landscape is evolving even more quickly than we have seen with other format shifts," said David Bakula, Nielsen's senior vice president for music industry research. Digital sales are declining much more rapidly than physical sales did during the switch from CDs to downloads, according to the report.

On-demand audio streaming grew to 38 percent of total listening consumption last year, the largest single slice of the pie, according to Nielsen Music's year-end report, released Thursday. That share surpassed total digital sales for the first time since Nielsen began tracking it.

Other nuggets from the report:

  • Hip-hop fans stream; rock lovers buy albums. Rock remains the dominant genre for album sales, both physical and digital, but streaming is led by R&B/hip-hop, with heavily streamed artists including Drake, The Weeknd, Kanye West and Rihanna.
  • Drake garnered the most streams by a ridiculous margin. In a hit year overall for Drake, the hip-hop artist racked up 5.4 billion streams. He lapped the next closest artist, rapper Future at 2.1 billion.
  • Chance the Rapper beats everybody at selling albums without actually "selling" any "albums." His recording "Coloring Book," which was released solely to streaming services, became the first to surpass 500,000 "album-equivalent sales" through streaming alone. Nielsen counts 1,500 streams as the same as 1 album sale and 150 streams as equivalent to a single song sale.
  • Did we mention? People are streaming music on demand, like, a lot more now. Last year, 27 songs surpassed 200 million on-demand streams, up from just two songs hitting that mark in 2015.