Global music revenues rose 3.2% year over year in 2015, with digital sales contributing 45% of all revenues, compared with a contribution of 39% from physical sales (CDs and vinyl, primarily). Digital revenues totaled $6.7 billion, an increase of 10.2%. Revenues totaled $15 billion in 2015, flat with the preceding two years.

Revenues from streaming rose 45.2% to a total of $2.9 billion for the year to “more than offset” declining revenues in sales of downloads and physical formats. Streaming revenues have risen by a factor of four in the five-year period to 2015.

Download revenues suffered a drop of 10.5% to $3 billion. Full-album downloads accounted for nearly half ($1.4 billion) of all download revenues.

The data were reported on Tuesday by the International Federation of the Phonographic Industry (IFPI). Frances Moore, IFPI’s chief executive, said:

After two decades of almost uninterrupted decline, 2015 witnessed key milestones for recorded music: measurable revenue growth globally; consumption of music exploding everywhere; and digital revenues overtaking income from physical formats for the first time. They reflect an industry that has adapted to the digital age and emerged stronger and smarter.

This should be great news for music creators, investors and consumers. But there is good reason why the celebrations are muted: it is simply that the revenues, vital in funding future investment, are not being fairly returned to rights holders. The message is clear and it comes from a united music community: the value gap is the biggest constraint to revenue growth for artists, record labels and all music rights holders. Change is needed – and it is to policy makers that the music sector looks to effect change.

If we had a nickel for every comment we’ve read by a music industry executive complaining about being ripped off by the likes of YouTube and Spotify, well, we’d be living the rock ‘n roll lifestyle.

But the industry does have a point — sort of. Music industry researchers at Midia have made several good points about the IFPI report. First, streaming revenue is growing, but relatively slowly, up just $70 million (31%) year over year, compared with 2014, while streaming music subscriber numbers are up by 61% to around 68 million. Midia attributes that disparity to steep discounts like Spotify’s promotional offer of a three-month subscription for just $1.00.

A second problem is that ad-supported revenues fell slightly, from $641 million in 2014 to $634 million in 2015. Not much, clearly, but the direction is wrong. And the IFPI does not count Pandora Media Inc. (NYSE: P) in this category, but does count YouTube and free streaming from other services like Soundcloud and Spotify.

Together these add up to a decline in streaming’s average revenue per user (ARPU) from $3.36 in 2013 to $3.16 in 2014 to $2.80 in 2015. Midia concludes:

Total blended monthly streaming ARPU for record labels was $0.37 in 2015. And if you’re wondering how ad supported and subscription ARPU can both be down but total ARPU up, that is because subscriptions are now a larger share of total streaming revenue (up to 78% compared to 71% in 2014).

The Midia post also has some interesting things to say about total revenues as reported by IPFI. The entire post is worth a read.

The full IPFI 2016 report also lists the top global recording artists, albums and singles for 2015. At the top of the lists are Adele, 25 and “See You Again,” respectively.

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