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It was a positive year in the end for the music business, declares Nielsen in the Nielsen Music Year End Report for 2016 [download page], as strong growth in on-demand streaming more than offset sales declines. In fact, on-demand streaming grew to account for 38% of all audio consumption, becoming the single largest consumption format for the first time in the process.

The Recording Industry Association of America (RIAA) had noted earlier last year that streaming had become the top source of music industry revenues in 2015.

Overall album consumption in 2016 was up by 3.1%, per Nielsen’s report, even as the number of album sales fell by 16.7%. Digital music consumption showed 8.9% growth, and on-demand audio streams demonstrated impressive growth of 76.4%. Nielsen notes that consumers seem to be shifting to streaming and away from digital song downloads, with the latter falling by 25%. That was a faster decline than experienced by physical sales.

There were numerous milestones set in streaming:

  • Some 27 songs exceeded 200 million on-demand audio streams, up from just 2 songs in 2015;
  • Twelve songs topped 200 million on-demand video streams, up from 7 in 2015; and
  • Whereas just 3 songs in 2015 had surpassed 500 million total on-demand audio streams, this past year 6 went over that mark, with 2 (Desiigner’s “Panda” and Rihanna’s “Work”) topping 700 million.

In other interesting trends:

  • Vinyl LP sales grew for the 11th consecutive year, reaching 13 million units;
  • For the first time in more than a decade, physical albums increased their share of total album sales on a year-over-year basis;
  • For the first time recorded by Nielsen, the internet/mail-order/venue store category – led by internet retailers and concert ticket bundles – became the largest share of physical sales, surpassing mass merchant outlets, which had held that title for the prior 9 years.

In other results, the Nielsen report highlights the top formats and artists for the year, earlier noting that rock dominates album consumption (41% share) while R&B/Hip-Hop leads the streaming landscape (28% share).

Based on the January 1-December 29 period, the Billboard charts reveal that:

  • Prince (2.23 million) edged Adele (2.21 million) for the most album sales;
  • Drake (8.8 million) topped Twenty One Pilots (6.5 million) for the most number of digital song sales;
  • Drake was far and away the top artist by on-demand audio streams (5.4 million), more than double the count for Future (2.1 million);
  • Drake’s “View” was the top album by total consumption (4.1 million), a metric that totals album sales, song sales and on-demand audio streams;
  • Adele’s “25” – however – topped Drake’s “Views” in album sales; but
  • Drake’s “One Dance” was the top song by consumption and the song that had the most on-demand audio streams.
  • The full report can be downloaded here.

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