The development of streaming vs physical sales in 2018

Every year, the face of the music industry shifts, conforming to new trends and consumer needs. The shifts in sales ultimately has a drastic effect on the revenue that artists take home as profit. What can be expected every year is that the way consumers purchase music will shift over time, leading to increases or decreases in physical sales. But how did the industry shift during 2018? In this article, we’ll look at physical sales and streaming revenue accumulated during 2018.

According to Nielsen Music, in 2018 music consumption jumped by 23% for album equivalent content. This rose to 618 million units from 501 million during 2018. To calculate this figure, album sales, SEA and TEA units were all combined together. This is a huge positive for the industry as it means that it continues to grow in value, something that will benefit everyone involved.

During 2018, hip-hop accounted for 26.6% of this consumption, beating all other genres outright. Therefore, it comes as no surprise that so many producers are delving into hip-hop as part of their experimentation with music production. In fact, hip-hop and electronic are two genres that regularly blend in order to create chart-topping hits. Particularly in the USA, where trap is still dominating the scene, hip-hop has always played a huge role in the electronic music industry and has continued to influence it heavily.

In 2018, sales figures for physical albums continued to decrease rapidly, a trend that has become globally recognised. The total sales fell by 15.8% to just 88 million. This figure includes CDs, vinyl, and cassettes. The figure for CD sales singularly dropped even further, by 20.9%. The total CD sales for 2018 only managed to reach 70.7 million. This figure is even more shocking when you consider that Spotify has 87 million paying users, meaning that there are more users paying for Spotify premium than there were album sales during the whole of 2018. Even the sale of digital albums decreased by 20.7%, dropping to 53.4 million. This level of decline could be attributed to the rise in the popularity of streaming services, which are making the sale of digital music almost completely obsolete. In fact, Apple Music will soon be completely closing their iTunes store in favour of moving all of their users to their streaming service, a choice which surprised many around the globe.

Last year vinyl sales increased its share of the full album-sales figure, increasing from 6.5% in 2017 to 11.9% in 2018. But, when looking at the whole figure of album sales, vinyl accounted for a staggering 19.1%. The shift towards vinyl isn’t something that started last year, consumers have been showing increased interest in vinyl over the last few years. Last year, it was the Guardians of the Galaxy soundtrack that achieved the highest volume of vinyl sales alongside Michael Jackson’s Thriller, each selling 84,000 copies.

In terms of streaming figures in the USA, Ed Sheeran’s heart-warming hit ‘Perfect’ was the only non-hip-hop track to break into the top ten. The most streamed track last year, by a huge margin, was Drake’s ‘God’s Plan’, which was streamed over 1.5 billion times. ‘God’s Plan’ even made a huge impact in the electronic music industry last year, becoming a regular feature during festival live sets, often simply as an acapella.

The continued dominance of hip-hop seems to suggest that the genre will, yet again, influence a lot of the electronic music that we see emerging this year. Despite the streaming figures only covering USA statistics, it is the trends emerging in the USA that usually have a huge impact on the shape of electronic music globally. For this reason, we’ll likely see many more producers collaborating with hip-hop stars into the future and taking influence from the genre itself.

It is predicted that the sale of physical albums will continue to decline into 2019, but the sale of vinyl will continue to rise. There has been an increasing number of producers choosing to release their albums on vinyl as well as regular CD, a trend that looks set to continue into the future. Despite this, streaming looks set to dominate the market into 2019 as Spotify and Apple Music compete over control of the industry as a whole, among other smaller streaming platforms.

Nielsen Music also included statistics on the most heard radio tracks of 2018. The statistics were based on the USA but still, have worldwide implications. In fact, Zedd managed to chart in fourth place with ‘The Middle’ which achieved 3.505 billion audience impressions in the USA over the course of 2018. This is a staggering achievement, illustrating just how radio-friendly the track is. While Zedd is regarded as a dance music artist, it has to be said that the track is largely pop-influenced, which is potentially why it proved so popular. It is one of the many tracks that emerged from electronic pop crossovers last year.

While a lot of the statistics published focus on the top artists, it is still worth keeping track of trends in order to benefit your own career. By looking at who did well during the year you can better understand how to engineer your own success. It is also important to keep track of where the most revenue is within the music industry. In order to generate an effective amount of revenue, it is important to understand how consumer preferences are shifting over time. For example, you shouldn’t expect to sell many physical copies of your music in the current climate. Instead, you should focus on digital streams, and engineer your strategy accordingly.