In a rather bizarre turn of events, CDs and vinyl records are making a small comeback. According to CNET, both physical mediums are now making more money than the iTunes Store, which dominated the industry roughly four years ago. Streaming also continues to grow and propel the music industry.

The report says that digitally downloaded music, including iTunes, accounts for just 11 percent of revenue from U.S. labels last year. CDs and vinyl have a slight edge at 12 percent. Obviously, streaming music is the big winner, raking in a whopping 75 percent of revenue last year.

Downloads represented just 11 percent of US labels’ revenue last year, a music industry trade group said Thursday. Physical sales — the term for music formats you can actually hold, which are mostly CDs and vinyl at this point — booked 12 percent. Instead, streaming music has been asphyxiating demand for downloads. Streaming sales were 75 percent of revenue last year.

In 2015, streaming and digital downloads were on equal ground, with roughly 34 percent of the market, each. Now, with services such as Apple Music and Spotify making it so easy to get music, streaming has taken over entirely.

The good news is that physical mediums aren’t dead just yet. The retail revenue from physical copies such as CDs and vinyl grew about 12 percent last year, earning $9.85 billion.

Music subscriptions from services such as Apple Music and Spotify saw 33% percent growth, or $4.66 billion. This number doesn’t account for “limited tier” subscriptions such as Pandora Plus or Amazon Prime Music. Limited tier subscriptions brought in $747.1 million, up 26 percent.

For services that allow you to stream music for “free” (ad-based) such as Spotify’s free tier, YouTube, or Vevo, it saw $759 million, up 15 percent.

Digital downloads saw a drop of 26 percent, down to $1.04 billion and physical sales saw a 23 percent decrease, down to $1.15 billion. However, vinyl records saw an increase of 7.9 percent, up to $419.2 million despite physical sales dropping overall.

Are you still buying music from iTunes or physical mediums such as CDs or vinyl? Let us know in the comments below!


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