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Record labels are enjoying their biggest revenue increase in over a decade

29 December 2016, 12:35 | Written by Laurence Day

Record labels have found a way to reverse their lengthy downturn and are now posting huge revenues once more.

It's widely known that the music industry's financial side has taken a hammering since the advent of the Internet, with torrents, streaming, legal downloads, and much more contributing to a worrying decline in profits for record labels and artists. It's not just the World Wide Web that's affected the industry either, with the global recession hitting fans' pockets hard.

But now, thanks to the controversial power of streaming, labels are posting big growth - their largest increases in quite some time.

Last year Universal Warner Music announced its biggest profits in over a decade, and earlier this month highest revenues in eight years earlier this month, with $1 billion earned from streaming - more than double its download revenue and roughly 10 times the amount earned from physical sales.

Streaming's rise has been staggering with the industry changing to accommodate the titanic forces of Spotify, Apple Music, Tidal, and more - even staunch opponents of streaming have relented, and the UK charts have been forced into a dramatic shake-up.

Paul Smernicki, the former head of digital at Universal Records, tells The Guardian: “I thought the days of the music industry talking about anything in terms of millions were gone, but now we are looking at billions of streams on an almost daily basis. If you look at the the raw numbers of people who are streaming, I think you could now argue that music has never been more popular. The value of reliability, convenience and accessibility to an enormous catalogue of songs for a small cost now trumps illegally downloading a song free... Spotify and Apple Music are now simply better than any hassle of an illegal download service and come without the risk, so people are willing to invest.

“You don’t even have to be a hardcore music fan for it to seem like good value," he adds. "People who previously thought they weren’t that into music, or didn’t like artists enough to buy entire albums, are now discovering they are far more interested in music than they thought. I think streaming has woken people up to how music can really find its place in your life.”

Even some smaller labels have seen benefits from the enormous impact of streaming. Because Music's senior vice-president Jane Third says that “streaming is a positive thing, 100%.”

“We have seen an upswing this year for the first time in more than 10 years and it’s going to continue to grow," she continues. "Our company has grown exponentially, and as soon as we started having hits in the streaming world, our revenues doubled. Overall, streaming is going to save the industry.”

Because's roster includes Major Lazer, Christine and The Queens, and Metronomy.

According to the Financial Times, the US industry is set to achieve something not seen since the late '90s: consecutive years of growth.

Not all labels are seeing the benefits, however, with Rough Trade founder Geoff Travis saying that their numbers are "shockingly low given the acclaimed quality of the releases" but that "other people seem optimistic and we are still in the game, so maybe there is a future.”

Meanwhile, artists don't all seem to be enjoying the same boon; an independent musician recently published his earning reports and it's a truly shocking read.

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