By Hannah Karp
The music industry's recovery continued in 2016, as subscription services helped revenues rise more than 11% in the U.S., and executives hope there is plenty more room for growth.
At $7.7 billion, the 2016 total was still about half its peak in 1999, before music sales were decimated by online piracy and other problems.
In a milestone, music-streaming companies such as Spotify AB and Apple Inc.'s Apple Music generated the bulk of record companies' revenues for the first time last year, according to new data from the Recording Industry Association of America.
These services, which typically charge about $10 a month for unlimited, on-demand access to tens of millions of songs, now count more than 22 million subscribers in the U.S. and accounted for more than 51% of the industry's revenue in 2016, up from 34% in 2015.
The growth in streaming revenue outweighed ongoing declines in CD sales and digital downloads, with sales of digital albums and singles declining 22%, faster than they ever have before.
The RIAA's chairman and chief executive, Cary Sherman, wrote in a blog post that despite the solid growth in 2016, "our recovery is fragile and fraught with risk," and questioned whether streaming revenues will continue to grow fast enough to offset continuing losses in CD and download sales.
One threat to subscription streaming's growth, Mr. Sherman wrote, is Alphabet Inc.'s YouTube, which offers free, on-demand music to its more than 1 billion users. Though YouTube has said it has paid more than $4 billion of its advertising revenue to the music industry since the video platform launched a decade ago, record labels have voiced frustration that it pays far less per stream than do paid services while competing with them for fans attention.
YouTube didn't immediately respond to a request for comment.
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