According to the Recording Industry Association of America (RIAA), a trade body, music revenues last year saw their biggest percentage gain since 1998 and this came on the back of consumers choosing to use services like Spotify and Apple Music.
Total revenues from streaming platforms were up 68% to $3.9bn, and putting its rapid growth in context, the RIAA noted that streaming accounted for just 9% of the market in 2011.
Furthermore, revenues grew across all the categories of streaming – whether paidsubscriptions, SoundExchange distributions, or on-demand ad-supported streams.
Some 22.6m Americans now subscribe to paid streaming services, whose revenues more than doubled by 114% to $2.5bn last year, while revenues from on-demand streaming services supported by advertising grew 26% to $469m.
However, while the outlook for streaming looks very positive, the RIAA went on to warn that revenues for more traditional formats continued to decline significantly.
Digital downloads, for example, generated revenues of $1.8bn, but these were down 22% compared to 2015. Individual track sales revenue also suffered, falling 24% in 2016, while digital album revenue was down 20% compared with the previous year.
With CD shipments also declining 21%, the RIAA reported that the total value of shipments of physical products decreased 16% to $1.7bn last year.
Cary Sherman, the RIAA's Chairman and CEO, commented on this dual trend of booming streaming services coupled with declining traditional formats.
"As excited as we are about our growth in 2016, our recovery is fragile and fraught with risk. The marketplace is still evolving, and we've experienced unexpected turns too many times before," he wrote in a blog post.
"Moreover, two of the three pillars of the business – CDs and downloads – are declining rapidly. It remains to be seen whether growth of the remaining pillar will be sufficient to offset the losses from the other two," he added.
Sherman went on to strongly criticise YouTube, observing that "it makes no sense that it takes a thousand on-demand streams of a song for creators to earn $1 on YouTube, while services like Apple and Spotify pay creators $7 or more for those same streams".
This happens, he said, because "a platform like YouTube wrongly exploits legal loopholes to pay creators at rates well below the true value of music while other digital services – including many new and small innovators – cannot".
Data sourced from RIAA; additional content by WARC staff