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Share this story.Digital music sales will overtake physical sales in the US before the year is out, according to. The growth of digital revenue is driven largely by subscription services, such as and, which have experienced rapid growth recently as downloads have started to level off.Revenue in the US from streaming is set to grow at four times the rate of downloads in 2012, ending at $413 million to downloads' $2.2 billion. In the same time, physical sales will decline by 9 percent, or $304 million.

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Music downloads are still the meat of digital sales, but the recent surge in streaming revenue will push digital over the edge.' Streaming services will take over as the leading revenue growth engine for the music industry in 2012, generating an extra $311 million—$8 million more than downloads at $303 million,' writes Ed Barton, director of digital media for Strategy Analytics.In the rest of the world, however, digital music has a longer road—its sales still won't overtake physical media globally until 2015. Around the world, physical sales are still shrinking (down 12 percent, according to Strategy Analytics) but online and mobile revenues have grown only 14 and 23 percent, respectively. The US, South Korea, and Sweden are all ahead of the digital music transition, and the format will dominate in those countries well before it conquers the globe as a whole. Funny how the rate of growth for streaming is miles ahead of that for downloading. Agreed it's hassle free, but I'd have thought mobile data caps would put a dent in that figure.What is surprising about this? The all you can eat buffet model worked for movies with Netflix and will do the same for music.

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Some streaming sites are free with ad support. The ones that have a monthly fee are relatively inexpensive. Why limit yourself to 15-25 99 cent single tracks when that same money buys you all the music you can consume? Where the streaming services are offered, I expect those options will overtake the outright purchase model in short order, just like Netflix crushed Blockbuster. Infinite streaming makes far more financial sense for avid music listeners.

In the rest of the world, however, digital music has a longer road—its sales still won't overtake physical media globally until 2015. Around the world, physical sales are still shrinking (down 12 percent, according to Strategy Analytics) but online and mobile revenues have grown only 14 and 23 percent, respectively. The US, South Korea, and Sweden are all ahead of the digital music transition, and the format will dominate in those countries well before it conquers the globe as a whole.Speaking from Australia, I'd like to see those figures graphed against average home/mobile broadband speeds - the correlation being that the faster speeds available, the higher take up of digital consumption. Because, frankly, my connection is terrible. Highest quality streaming service, no Facebook requirement, customizable radio option, huge library including Pink Floyd, and you're able to save musicians as favorites, which I know you can't do (yet) in Spotify.The interface definitely needs some work though, but it's useable. I like Spotify's interface, but there's so much shit in the way of the actual music (apps, friends, social, etc.).I can see why people would prefer to download and own the music, but spending the equivalent of an iTunes download once a month for a MASSIVE library with unlimited listening is an excellent deal - if you have a good broadband connection virtually all of the time. This is a bigger deal for the industry than it is for most consumers, because artists make only a tiny fraction on streaming compared to what they make on CD sales.Seems about right to me, given that streaming isn't delivering the same sound quality as a CD or better.

TThe sad part will come when streaming gains so much popularity that the labels will be forced to pay out more from it in order to keep the machinery afloat, and better sources (i.e. The physical media) dry up. But perhaps by then hi res streaming and real bandwidth will both be realities. Funny, I'd think Pandora would be competing against traditional radio, you know, clearchannel.Downloads? Separate for me.AgreedI don't stream only download, I prefer to own the music (or the right to use without a monthly fee)I wouldn't mind streaming services if they kept the music I liked all the time, but that had proven to be impossible as record label deals expire or are non existent with the sort of niche music that I like. (still confused why you can't find Metallica on Spotify)honestly the best music service I've used so far is Grooveshark because the playlist is determined by the users instead of being curated by tons of record label contracts (the RIAA has been trying to put them out of business for years) also not having to pay a subscription fee to access the browser version is nice too.

This is a bigger deal for the industry than it is for most consumers, because artists make only a tiny fraction on streaming compared to what they make on CD sales.They don't really make money from either, the difference is negligible. What ultimately needs to happen is bands and streaming companies need to start dealing directly, without the middleman. Or at least something along those lines, where bands/musicians have more say in what they can do. Hell, Clap Your Hands Say Yeah self-released their first album in 2005, and became pretty famous pretty quickly because of music blogs, YouTube, etc. The best part of these streaming services is the discovery! I never took a risk and bought an album on iTunes unless I knew I would like it.

With Spotify, I can try all sorts of new artists and genres without fear, and the radio services (not as good as Pandora's) helps keep me find new music from obscure artists or ones I've never heard of.Thus I listen to far, far, more music now, and like a much greater variety of music. Spotify/Rdio/MOG = WIN!I want to second this. I have a paid Pandora account and have heard so many other great artists when I listen to one of my artist-specific stations. And you know what, I go out and BUY records from some of these new artists I have discovered.The music industry has to adapt to these new forms of content delivery or they will go out of business due to their own short-sightedness.

Yhbv24, take a look at these numbers from 2010:It shows a fairly equal distribution of income for labels and artists for CD sales, and only fractions of a penny for streaming. Yes, the situation needs to change. Yes, some artists have found success bypassing the entire process by self-distributing.' People can't tell the difference between 320 kbps streaming and lossless, especially consumers who are using consumer audio equipment.' I can, and I'm people. Guessing you think I need to 'prove' something, perhaps in an irrelevant blind test, am I right? You'll pardon me if I take a pass on that waste of time.

Yhbv24, take a look at these numbers from 2010. Rn-onlineThanks for that, it's very interesting, although I have a few problems with it. A stream doesn't necessarily mean it would have been a sale, and it doesn't take into account the combined mediums.

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As in, often a band/musician will release albums on CD, as downloads from their site, on all of the streaming services, as vinyl, etc. It also doesn't take into account merchandizing and live shows.I'm not saying it's not an upsetting graph, just that it doesn't necessarily take everything into account. I can, and I'm people. Guessing you think I need to 'prove' something, perhaps in an irrelevant blind test, am I right?