Despite concerns, it’s full-stream ahead for the music industry

The biggest growth sector for the music industry remains one its most controversial.

Midyear data from Nielsen SoundScan and Nielsen BDS revealed that streaming music volume is up 24% in the U.S. over the same period last year, as more than 50 billion audio and video streams of songs have been tabulated in the first six months of 2013.

And the number is even greater than what Nielsen is reporting. Providers who share data with Nielsen include video sites such as YouTube and Vevo, as well as subscription services such as Spotify, Rdio and Rhapsody, among others.

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Popular streaming radio service Pandora, however, is not included in Nielsen’s numbers. Pandora claims more than 200 million registered listeners worldwide.

The most streamed song of the year thus far is Baauer’s dance-hit “Harlem Shake.” The song has been streamed more than 438 million times, no doubt driven by the YouTube craze the song inspired. A distant second is “Thrift Shop” from hip-hop act Macklemore & Ryan Lewis, with more than 186 million streams.

Users continue to tune into subscription services to experience new music. Nielsen earlier this week reported that Jay-Z’s “Magna Carta... Holy Grail” garnered approximately 14 million streams on Spotify. The album topped the pop chart with 528,000 copies sold, a figure that did not include the 1 million copies made available by Samsung.

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The Nielsen data come just days after Radiohead leader Thom Yorke and producer-artist Nigel Godrich called into question compensation artists receive from streaming services such as Spotify.

The Radiohead frontman issued a series of tweets on Sunday after longtime collaborator Nigel Godrich announced their recent Atoms for Peace album, “Amok,” and a number of projects from the two would no longer be available on Spotify, arguing that the fractions of a dollar artists receive per stream do not result in a sustainable business model.

“It’s an equation that just doesn’t work,” Godrich later wrote. “The music industry is being taken over by the back door … and if we don’t try and make it fair for new music producers and artists, then the art will suffer.”

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The merits, or lack thereof, of streaming services such as Spotify have been a debate the industry has been mired in much of the past few years. Spotify CEO Daniel Ek defended the service at this year’s South by Southwest music conference in Austin, Texas, noting that the company will be paying more than half a billion dollars to labels this year alone.

One’s thoughts on streaming aside, the industry is clearly heading toward a digital future.

Sales of full album downloads are up 6.3% in the first 2013 compared with the same period last year. The most purchased album for download was Justin Timberlake’s “20/20 Experience.” Of the album’s 2.5 million sales, 869,000 have come from the digital sector.

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