Streaming replaces lost CD sales

Sol3 Mio had the biggest selling local album of 2014.

Revenue from the New Zealand music industry continues to contract, but the rate of decrease has slowed and streaming services are starting to make up ground.

That's shown in a report released today by industry body, Recorded Music New Zealand.

Between 2012 and 2013, overall revenue dropped sharply from $72.2 million to $66.7 million.

A slump in physical sales accounted for much of that drop ($35.5 million down to $27.1 million).

Between 2013 and 2014, physical sales once again experienced a sharp drop from $27.1 million to $21.4 million, but streaming revenue grew, rising from $5 million to $12.7 million, which has slowed the overall drop in revenue.

Another rise in revenue from public performance and broadcast ($11.6 to $13 million) also helped, and the report notes a substantial growth in vinyl sales, which are up more than 200 per cent on 2013.

The report shows a clear trend for a new willingness to pay for content which doesn't come on a CD or record which is a positive step for an industry plagued by illegal downloading.

Various high profile artists such as Radiohead's Thom Yorke have previously condemned streaming services for the very low level of revenue they return to artists.

Latest figures seem to indicate that streaming is the revenue source experiencing the biggest ongoing growth and looks set to overtake digital downloading. Physical sales remain the biggest source of income.

Recorded Music NZ CEO Damian Vaughan says the diversification of revenue sources reflects how audiences are consuming music.

"This year more than ever we have seen revenue spread near equally across multiple and very diverse sources," Vaughan says

"This is a direct result of fans' ability to purchase and listen to their favourite songs in so many new varied ways - from streaming and downloads to the local record store.

"That makes it more important than ever for record companies and recording artists to understand who their audience is, where they are and how they are consuming music.

"We really are spoilt for choice when it comes to our options in NZ and our artists have the ability now to reach their fans in a more meaningful and targeted way."

How the industry made $66.2 million
Physical product: $21.4 million
Digital downloads: $19.1 million
Streaming: $12.7 million
Public performance and broadcast: $13 million

Previous years' revenue figures
2012: $72.2 million
2013: $66.7 million

How New Zealanders are buying music in 2014
Streaming: 24%
Downloads: 36%
Physical: 40%

2014's top sellers in NZ
Single
Happy by Pharrell Williams
Album
X by Ed Sheeran
New Zealand single
Freaks by Timmy Trumpet and Savage
New Zealand album
Sol3 Mio by Sol3 Mio