The rise of streaming music has not been met with praise from some in the music industry. While a handful of artists have continued to resist the platform and push album purchases, a mid-year update from the Recording Industry Association of America shows that streaming music is helping the struggling industry get back on track.

All in all, the music subscription industry is on track to surpass $2 billion by the end of this year thanks to services like Apple Music and Spotify. In fact, streaming in all of its forms accounted for almost half of all recorded music revenues during the first half of 2016. As RIAA CEO Cary Sherman notes, this is a dramatic shift for an industry that was predominantly focused on physical products 6 years ago.

In terms of numbers, there were an average of more than 18 million music subscriptions during the first half of this year, which is double the number reported at the same time last year. “Music subscriptions are now significantly bigger revenue generators than CD sales, and virtually equal to permanent downloads,” Sherman writes.

Streaming revenue also grew 57 percent during the first half of 2016, reaching $1.6 billion and accounting for nearly half of all industry sales.

Citing label executives, Bloomberg reports that most Apple Music subscribers are people new to streaming services, not former Spotify users. Spotify is believed to have around 40 million paid users, while Apple has 17 million as of earlier this month.

Yet Apple is no longer the only player in the market for digital music. Spotify operates a larger paid subscription service and has showed no signs of slowing down since Apple Music began competing in that market. Most of the users for Apple Music are people new to paying music, not former Spotify customers, according to label executives.

Streaming isn’t all good news, though. Sherman took today’s mid-year update to address the RIAA’s relationship with YouTube. YouTube’s payout to artists has long been criticized by record industry executives and today is no different. “Does it make any sense that approximately 1000 plays of a song on one streaming service yields dramatically different payouts than a song on a different service that gets to hide behind the failing 1998 Digital Millennium Copyright Act (DMCA)?,” Sherman rhetorically asks in his blog post.

Sherman notes that while a song streamed from YouTube is no different for the fan, it’s dramatically different for the artists and labels. Sherman also put Spotify’s free streaming tier in the same boat, noting that the payout differences between free music streaming and paid is “jarring and indefensible.”

As you would expect, physical media sales are not lending to the rebirth of the music industry in any fashion. Physical media sales dropped 14 percent during the first half of this year compared to last year. Paid downloads, such as from services like iTunes, were also down “double-digit” year-over-year.

Apple is continuing to push Apple Music and has given the Music app an entirely new design with iOS 10.

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About the Author

Chance Miller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

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