The U.S. record industry was the same, but different, in 2015. You may or may not have noticed great change, as old ways of doing business continued to change — but if you saw industry revenues at the mid-year point, you might have also noticed revenue fell about 5 percent (though a boost from Adele might improve the final year-end tally).
In 2015, overall music consumption tracked by Nielsen Music grew 15.2 percent to 549.4 million track equivalent albums and streaming equivalent albums. These are metrics that convert digital purchases and streaming activity into albums for purposes of comparing consumer activity over time.
Why doesn’t the record business feel more successful? A similar question was asked here in May. Presentations at the 2015 Music Biz Association conference by the RIAA Josh Friedlander and Nielsen Music’s David Bakula showed a strong increase in U.S. streaming activity corresponding with flat recorded music revenues. A partial explanation came from MusicWatch’s Russ Crupnick — about 50 million of the 120 million people using music audio and video streaming sites won’t pay to stream. The remainder will be difficult to reach. So that’s one explanation.
Another explanation is digital deflation, a term that explains how content loses value when consumption switches from physical to digital formats. (In economics the term refers to the idea that digital technologies lead to greater productivity and cheaper prices.) In advertising, digital deflation explains a loss in advertising revenue because digital advertising is less expensive than traditional advertising on a cost-per-thousand impressions basis.