The narrative in the music industry is one of doom and gloom. The prevalence of free, ad-supported listening is supposedly killing off digital downloads without replacing revenue, and artists and music labels are said to be suffering as a result.

However, a look at the Big Three labels — Sony Music Entertainment, Universal Music Group, and Warner Music Group — suggests quite the opposite: Revenues are growing, and margins are climbing, too, despite the upheaval in the broader industry. And, it turns out, streaming is actually the reason for the good news.

note: Universal parent Vivendi reports this metric sporadically. the data shown here for universal is partial. sources: Company Reporting, jackdaw research Analysis

Digital revenue has grown from around 40% to more than half of all revenue over the past two years, but what’s most interesting is the trajectory over that period. For a while, total digital revenue stalled, and even declined, as streaming services began to take off. Since those services were largely free and ad-supported, the revenue per user was very low; my analysis of RIAA figures suggests an average of just a handful of dollars per year.

However, with the growth in subscription streaming services, driven first by Spotify and more recently by Apple Music, digital revenue has turned a corner, growing overall as increased streaming revenue offsets declining download revenue. RIAA figures out this week show that paid streaming in the U.S. has suddenly begun to take off in the past year. The figures show that paid streaming represented 63% of U.S. streaming revenue in the first half of 2016, up from 45-47% in the first half of each of the previous years – that’s a dramatic change in trajectory, and revenue from paid streaming leapt from under $500 million in the first half of last year to over $1 billion in the first six months of 2016.

sources: Company Reporting, jackdaw research Analysis

Revenue growth hasn’t been consistent across the three labels, which have traded some assets over the past few years, artificially boosting or denting growth temporarily. But overall, on a trailing four-quarter basis, combined revenue of the Big Three has been rising steadily, and margins largely have been trending upward. (Sony has been growing the fastest, rapidly extending its lead over Universal as the largest group. Warner continues to bring up the rear at just over half the size of its major competitors.)

sources: Company Reporting, jackdaw research Analysis

The picture that’s emerging, therefore, is one in which streaming is a boon rather than a drag for these businesses. That, in turn, is helping to offset the inevitable ongoing decline of physical album sales, which remains the biggest headwind for the music labels overall.

None of this is to say that the labels are delighted with the current state of things. They and their artists have publicly expressed dissatisfaction with the payouts they receive from YouTube in particular, and revenue-sharing rates are a sticking point in Spotify’s current attempts to negotiate long-term deals with the labels ahead of an IPO. The industry would like to see more emphasis on paid streaming, driven by more exclusive content and features. But the labels are certainly in better shape than they have been for some time.