Music industry bosses are increasingly concerned about a decline in music revenues as record sales are increasingly replaced by streaming.
The industry has been struggling to keep up with the growth of streaming services like Spotify and Apple Music and, increasingly, Google Music and Amazon Prime Music, but the problem has become more pronounced in the last two years.
The music industry has seen an increase in piracy of its music in the past year and a half, and the rise has hit many major record labels hard, including the major labels themselves.
A new report from the Recording Industry Association of America said the industry had seen record sales fall to $5.4 billion in 2015, down from $7.2 billion in 2014.
In that same year, digital music revenue was down 1.4% to $1.6 billion, but music-related sales were up 4.4%.
“The music business is no more profitable than any other business, and we believe it is in deep trouble,” said Bob Iger, chairman and CEO of the music giant Disney.
The decline in revenue has also been driven by a drop in subscription revenue, a loss of digital downloads and a shift from traditional media companies to streaming platforms.
According to the report, music sales are still more than 40% of the overall U.S. economy, but that has declined from 65% in 2008.
“It is no secret that the music industry is going through a difficult time,” Iger said.
“But we need to recognize that the major music labels are very concerned about the situation.”
The music-industry group, which represents record labels, music distributors and music publishers, said that the biggest threats to the industry come from the growing use of online services and from a rise in the use of apps and services like Pandora and Spotify.
“The rise of these new platforms has led to a shift of consumers from paying a monthly subscription to paying for music through mobile devices, which in turn has led the industry to shift toward services like Amazon Music,” said Iger.
“That is a real concern.”
The industry is trying to change that, but there is a big challenge ahead, Iger added.