Kendrick Lamar, 'Despacito' Propel 40 Percent Jump In On-Demand Streaming In Nielsen Music's Q3 Report

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Justin Bieber, Luis Fonsi & Daddy Yankee

One bright spot for physical: vinyl albums gained 3.1 percent, with a 50-year-old Beatles LP as top seller.

Streaming growth continues to accelerate as total on-demand streams for audio and video in the United States hit 442.44 billion for the first nine months of 2017, up 40.5 percent from the 315 billion accumulated in the first nine months of 2016, according to Nielsen Music. 

That percentage growth is even greater than the 36.4 percent year-to-date growth tallied at the mid-year point when streams totaled 284.7 billion, versus 208.7 billion at the six-month point in 2016.

As part of streaming's growth, albums plus track-equivalent albums (10 tracks=1 album consumption unit) plus stream-equivalent albums (1,500 streams=1 album consumption unit) totaled 456.2 million consumption units, up 11.1 percent from the 410.63 million garnered in the first nine months of 2016.

Typical of the growth of streaming, Luis Fonsi & Daddy Yankee’s "Despacito," featuring Justin Bieber has already topped the 1.11 billion on-demand streams mark (combined audio and video), while last year the top on-demand streaming song, Desiigner's "Panda," had 674.4 million streams at the end of the third quarter. In fact, seven other tracks in 2017 surpassed the "Panda" total for the first three quarters of 2016.

Meanwhile, the top album on a consumption unit basis is Kendrick Lamar’s DAMN, with 2.35 million consumption units., followed by Ed Sheeran's Divide, with 2.13 million consumption units; and Drake's More Life, at No. 3, with slightly more than 2 million consumption units.

But each artist got to their total in different ways, with Sheeran leading the way in album sales at 865,000 copies and track sales, at 4.3 million units from the Divide album; while Drake led the way in top on-demand audio streams of songs from More Life, at nearly 2.7 billion units; while Lamar was No. 2 in album sales with 814,000 copies; and No. 2, at 2.03 billion plays, in on-demand audio streams.

Within individual streaming data, audio on-demand grew 59.7 percent to 287.15 billion from the 180.1 billion reported at the end of the third quarter in 2016; while video on demand streaming grew 15.1 percent to 155.3 billion streams, versus 134.9 billion in the corresponding year-earlier period.

Moving over to sales, physical albums fell 13.3 percent to 67.4 million copies from 81.5 million copies; while digital albums fell 19.5 percent to to 50.1 million copies from 62.2 million copies at the end of the nine-month period in 2016. Overall album sales, both physical and digital combined, were down 18.3 percent to 117.5 million copies from 143.7 million copies.

Within physical, CD sales fell 19.9 percent to 57.76 million copies in the first three quarters of 2017, down from 72.1 million copies in 2016’s corresponding period; while vinyl albums gained 3.1 percent to 9.35 million units from 2016’s year-to-date total of 9.07 million units. The Beatles Sgt. Pepper’s Lonely Hearts Club Band, is the top selling vinyl album with 40,000 units.

Track download sales had the hardest time of all formats and configurations, falling 23.1 percent to 437.5 million units in the first nine-months of 2017, versus the 569.2 million units in 2016. Not only is "Despacito," the most streamed song so far this year, it’s also the most downloaded track with nearly 2.5 million units, followed by Sheeran’s "Shape Of You," at nearly 2.4 million units, garnered in the first nine-months of 2017.

Finally, looking at market share, Universal Music Group continues to lead the industry with 36.35 percent in album plus TEA plus SEA for audio-on-demand (market share doesn’t include video-on-demand), followed by Sony Music Entertainment at 26.9 percent; Warner Music Group at 17.2 percent; and the independent sector at 19.53 percent, according to Nielsen Music.

So UMG is up from last year’s market share total of 35.63 percent; while Sony is down from the 29.01 percent it had in the first nine-months of 2016, as is WMG, down from 17.76 percent; and the indies, collectively are up from 17.6 percent.

While this market share is calculated based on distributor-owned, as opposed to the label-owned method preferred by A2IM -- which Billboard calculates twice a year at mid-year and year-end -- the above numbers are not a true apple to-apple comparison for the majors because they count WMG’s Alternative Distribution Alliance market share in the independent sector. Meanwhile, SME's The Orchard is included under the parent's total; and Caroline and INgrooves are included under UMG's total.