It looks like happy days are here again: U.S. recorded music sales were up 11.4 percent in 2016. The industry brought in $7.65 billion in revenue, according to the RIAA, up from $6.87 million in 2015.
This isn't only the first such significant growth since Napster emerged in 1999 -- it's the first double-digit growth the business has seen since 1994. Back then, recorded music sales grew by more than 10 percent three years in a row.
Unsurprisingly, streaming is pulling the business back to health, as revenue grew 68.5 percent to $3.93 billion, up from $2.33 billion in 2015. In fact, streaming grew so much last year, that it now accounts for more revenue than downloads, CDs and vinyl combined. Together, these formats brought in $3.51 billion. Paid music subscriptions doubled in the U.S., according to the RIAA -- up to 22.6 million, from 10.8 million in 2015.
Even with this robust growth, recorded music still brings in about half of the $14.6 billion it generated at its 1999 peak.
There is more good news, though. When you break out the year's $883.9 in royalties collected by SoundExchange and divide revenue by the 431.74 billion streams counted by Nielsen Music, the average per-stream rate is $0.0072. Last year, that number, which includes video and audio on-demand streams, had dropped to $0.00517. In 2014, it was $0.00666.
So even though on-demand, ad-supported revenue, like that from YouTube and Spotify's free tier, rose 25.9 percent to $469 million, paid subscription services are growing even faster. In fact, that revenue is growing three times as fast revenue from ad-supported services. Paid subscriptions generated $2.26 billion for the industry industry, up 94.9 percent from $1.16 billion in 2015.
On the sales side, digital downloads accounted for $1.84 billion, while physical sales were $1.67 billion. The decline on the digital side came largely from singles: download song sales fell to $751.1 million, which led to a 24.1 percent decline in revenue to $9.06.8 million.