February 28, 2020
The Recording Industry Association of America (RIAA) just released a study that revealed the degree to which streaming has the upper hand in music revenue. It now accounts for 79 percent of the industry, having grown 13 percent in 2019 from $9.8 billion to $11.1 billion in retail value. Another promising sign was that revenue from paid subscription services grew 25 percent year-over-year, to $6.8 billion. Such subscription services now account for 61 percent of all U.S. revenue for recorded music.
Variety reports that, “the actual number of paid subscriptions rose 29 percent, with 60.4 million in 2019, versus 46.9 million the year before,” representing a “more than five-fold increase in music subscribers from just four years before, when the total number of people ponying up on a monthly basis was a mere 10.8 million.”
Losing ground are both physical sales — now a mere 10 percent of the market — and digital downloads. The latter, just 8 percent of all music revenue, slumped 18 percent between 2018 and 2019. According to the RIAA, “this was the first year since 2006 that the money brought in from paid downloads came in at less than a billion dollars.”
Physical music products have been declining for so long that they only lost 0.6 percent from 2018, to $1.15 billion. The trend for vinyl LPs also propped up physical sales, which shot up 19 percent to $504 million, representing “the biggest annual number for LPs since 1988.” Variety points out, however, that it is only 4.5 percent of all revenue, noting that, “it may not be many years until vinyl finally overtakes CDs as the physical media leader, as they cross in opposite directions on the graph.”
Overall, the RIAA reported significant growth over the last decade, from $7.8 million in 2009 to, in more recent years, $11.1 billion. RIAA chair/chief executive Mitch Glazier wrote in a blog that, “two things are abundantly clear: Paid subscription streaming is driving the return to growth; and achieving long-term sustainable success still requires good public policies.”
At the same time, he noted that “lower- and middle-class musicians find themselves being squeezed out of making a living from recorded music as their entire catalogs can be consumed for pennies instead of dollars.” The report, he added, “reveals how much farther we must go to assure a healthy music community in which all music is valued and creators are fairly compensated.”