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Spotify And Apple Music Fuel A 2015 Surge In Music Streaming Revenue

|Includes: Apple Inc. (AAPL), P, SNE, SPOT, VIVHY

Trade group IFPI's 2016 Global Music Report could also have been titled "Why Apple needed to launch Apple Music." Or "Why Pandora needs to launch a streaming service soon." Streaming services revenue was an estimated $2.9B (+45.2% Y/Y) in 2015 and 19% of global music industry revenue. Download revenue fell 10.5% to $3B (20% of industry revenue).

IFPI estimates 68M people now use streaming subscription services, up from 41M in 2014 and just 8M in 2010. Spotify (MUSIC) recently topped 30M paid subs; Apple Music is above 11M. Pandora (NYSE:P), which has seen active listener growth for its web radio services flatline, is prepping its own subscription offering.

Overall, digital revenue rose 10.2% to $6.7B, and made up 45% of industry revenue. That helped total industry revenue rise 3.2% to $15B, its first significant Y/Y increase (per the IFPI) in nearly 20 years. Welcome news for big-3 music labels Sony (NYSE:SNE), Universal (OTCPK:VIVHY), and Warner Music. Nonetheless, IFPI insists a "value gap" exists that's "depriving artists and labels of a fair return for their work."

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