Still, revenue growth is being hampered by YouTube, whose payments aren’t keeping pace with other music streamers, according to a music industry report.
Music industry revenue grew 6 percent in 2016, to $15.7 billion, according to the report from the International Federation of the Phonographic Industry.
That is nearly double the 3.2 percent gain in 2015 — when the music industry recorded its first back-to-back annual sales gain in nearly two decades, according to the IFPI.
On the downside, revenue from digital purchases slumped even more in 2016 than in the previous year — falling 20 percent, compared with a 10 percent decline the previous year.
The IFPI report took aim at YouTube — saying the streaming giant, with its 900 million users, returned just $553 million to the labels in 2016.
By comparison, the 212 million users of global streaming subscription services — like Spotify and Apple Music — contributed more than $3.9 billion in 2016 revenue.
The labels are upset with the small fees paid by YouTube in comparison to its size and popularity, the source said. Despite the YouTube shortcoming, the report noted, revenue from all streamers was up sharply from 2015.
In 2015, the entire ad-supported revenue sector contributed $634 million. In 2016, that rose to more than $4.5 billion.
Music labels are currently in negotiations with YouTube over a fresh deal to use videos.
While the labels get paid each time a song is streamed, they receive a portion of the much smaller ad revenue from free ad-supported services such as YouTube, which also has a paid subscription tier called YouTube Red.