On-demand streaming now accounts for the majority of audio consumption, says Nielsen

U.S. album sales declined in 2017 as streaming continues to grow, according to Nielsen’s year-end music report released this week. The report found that album sales, including both digital and physical, fell 17.7 percent last year to 169.15 million copies, down from 205.5 million in 2016. Meanwhile, streaming once again soared, leading the overall music industry to growth, largely due to the significant 58.7 percent increase in on-demand audio streams over last year.

In total, on-demand audio streams surpassed 400 billion streams in 2017, compared to 252 billion in 2016, and overall on-demand streams, including video, exceeded 618 billion. This led to the music industry’s growth of 12.5 percent in total volume, over 2016.

On-demand audio streaming now accounts for 54 percent of total audio consumption, Nielsen also said, up from 38 percent of the total in 2016 and 22 percent in 2015.

Notably, that makes 2017 the first time on-demand audio has accounted for the majority of audio consumption*.

On-demand audio streaming has also now passed all other ownership formats, including physical and digital album sales and other digital track equivalents, for the first time in history in 2017.

The growth in on-demand streaming even contributed to a 20.5 percent rise in total digital volume in 2017, even while digital album and track purchases were down. With video and audio combined, on-demand streaming grew 43 percent this past year.

Not as surprising, Nielsen found that audio streaming is more popular on weekdays, while video streaming is tops on weekends.

Streaming’s growth is shaping the music market in other ways, too.

For example, R&B/Hip-Hop’s popularity with streaming consumers – like those on soon-to-IPO Spotify, where RapCaviar has become the most influential playlist in music – has now passed Rock as the largest genre in terms of total consumption.

R&B/Hip-Hop artists again led total volume this year, scoring 8 out of the top 10 spots for highest volume artists. Drake led with 4.8 million total track equivalents, followed by Kendrick Lamar (3.7M).

Ed Sheeran (3.6M) and Taylor Swift (3.4M), from the Pop genre, came in at number 3 and number 4 respectively, said Nielsen.

Streaming’s growth contributed individual tracks reaching notable milestones, too. For example, in 2017 there were 19 songs that reached 500 million in on-demand streams, compared with only 6 in 2016. (And 17 of those 19 tracks were from the R&B/Hip-Hop genre).

In addition, 10 songs surpassed 400 million on-demand audio streams, compared with just one in 2016.

The top streaming track, in terms of both video and audio, was “Despacito” by Luis Fonsi & Daddy Yankee featuring Justin Bieber. It saw a whopping 1.3 billion+ streams last year.

But even while streaming gained at the expense of album sales, there was one bright spot: vinyl.

Digital album sales were down 19.6 percent to 66.2 million in 2017; physical albums were down 16.5 percent to 102.9 million; but vinyl grew by 9 percent to 14.3 million, up from 13.1 million in 2016.

That means vinyl, which has seen 12 straight years of year-over-year increases, now accounts for 14 percent of total physical album sales. Physical albums, meanwhile, accounted for 61 percent of total albums sold.

Nielsen’s full report, which delves into individual artist successes and other music events, is available for download here.

Update: 1/31/18: Note that Nielsen’s definition of audio consumption excludes radio airplay, the radio people want you to know. You probably understood that, given the report’s focus on on-demand streams and album sales and whatnot, but in case you didn’t: DON’T FORGET THAT RADIO EXISTS, YOU GUYS.