In 2018, the music business experienced its third consecutive year of growth in revenue from recorded music in the U.S. Streaming continued to power the industry’s recovery after years of declines.

Pop singer Ariana Grande was the top-selling artist in the first half of the year, according to Nielsen Music, with 285,000 albums sold and 2.59 billion on-demand audio streams. Hip-hop artists, however, have fared particularly well in the streaming era.  Rappers securing seven of the 10 top-streaming slots. Drake, the No. 2 selling artist overall, led the way in streaming with 2.66 billion on-demand audio streams.

Revenue from music streaming in the U.S., including paid subscriptions and ad-supported options, increased 26% to $4.3 billion in the period.  This represented 80% of the industry’s total revenue.

Paid subscriptions surged 31% to $3.3 billion, accounting for 62% of total industry revenue.

YouTube and Spotify’s free tier grew 25% year-over-year

Meanwhile, revenue from ad-supported on-demand streaming services like Alphabet Inc. ’s YouTube and Spotify’s free tier grew 25% year-over-year to $427 million.

With digital sales—which were $462 million in the first half of the year—a listener pays to download a permanent copy of a piece of music. That’s usually 99 cents to $1.29 for a song and $10 to $15 for an album. Users of streaming services pay around $10 a month to rent access to an unlimited catalog of music.  Artists get paid a fraction of a penny each time someone listens to one of their songs.

Write to Anne Steele at Anne.Steele@wsj.com