The music business is booming, and it's doing so thanks to streaming. But the tech pioneers who made this possible in the last two years aren't making any money, and neither, really, are musicians: It's legacy businesses -- the music companies that own the catalogs -- that are collecting all the profits. Something has to give.
The Recording Industry Association of America reports that U.S. retail music sales were up 17 percent year-over-year in the first six months of 2017, to $4 billion. That's still very far from the industry's revenues at the heightof the compact disc boom in 2000, but it's spectacular for this decade. Streaming is running behind this achievement: In just two years, it's grown from 33 percent to 62 percent of the market.
Yet the market leader, Spotify, is still unprofitable after posting an operating loss of $412.3 million in 2016. Pandora, another beneficiary of the streaming boom, posted 10 percent year-over-year revenue growth in the three months to June but dramatically increased its net loss -- to $125.8 million from $76.3 million. For Tidal, founded by rapper Jay-Z and now part-owned by Sprint, no profit is in sight. It's unclear how much Apple and Alphabet make from their streaming services because the companies don't break out these results, but they probably would do so if the services were profitable.
