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RIAA: Music Industry Revenues Up 9.2% in 2020

2020 was tough all over—but not for the music industry, which grew revenues for the fifth consecutive year, ticking up 9.2% to $12.2 billion.

US Music Industry RevenuesWashington, DC (March 1, 2021)—Despite the disruption of the coronavirus pandemic, music industry revenues in the United States grew for the fifth consecutive year in 2020, ticking up 9.2% to $12.2 billion, according to the RIAA’s latest annual report.

Revenues from a wide array of streaming services—from internet radio to social media, subscription services to fitness apps—contributed 83% of total music industry revenues last year, growing 13.4% to $10.1 billion in 2020, according to the RIAA’s end-of-year report. For the first time, the streaming category figure includes music license revenues from Facebook and streaming fitness services.

Mitch Glazier, RIAA chairman and CEO, commented on Medium.com, “The headline numbers tell a story of continued, strong growth for streaming, reflecting music’s role in the broader online ecosystem as a key engine fueling tech platforms, online services and apps,” such as Facebook, TikTok and Peloton.

US Music Industry Revenues 2020

Paid subscriptions to on-demand streaming services have contributed the majority of recorded music revenues each year since 2018, according to the report. In 2020, full service paid subscriptions grew 14.6% to $7.0 billion. Additionally, limited tier paid subscriptions—services limited by factors such as mobile access, catalog availability, product features or device restrictions—grew 13.4% to $724 million. Services like Amazon Prime, Pandora Plus, music licenses for streaming fitness services and other subscriptions are included in this category. Combined, total paid subscriptions accounted for 64% of total revenues at estimated retail value.

The average number of subscriptions grew by the largest ever increase in a single year, up 15 million from 60.4 million in 2019 to 75.5 million in 2020. The volume of music streams on these services continued to grow, with hundreds of billions of streams delivered to more than 100 million listeners in the United States, but only contributed 9.7% of revenues.

COVID-19 impacted ad-supported on-demand revenues for music, driving a broad decline in advertising revenue growth across many forms of media. Revenues from these services, such as YouTube, the free version of Spotify and Facebook, grew 16.8% annually to $1.2 billion in 2020. Three years prior, the industry enjoyed an average of nearly 30% growth.

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Revenues from digital and customized radio services grew 3.9% to $1.2 billion in 2020. The category includes SoundExchange distributions for revenues from services like SiriusXM and Internet radio stations, as well as payments directly paid by similar services, included in the report as “other ad-supported streaming.”

Revenues from digitally downloaded music were down 18% to $674 million in 2020, the report also shows. Permanent downloads of albums fell 13% by value to $320 million. Individual track sales were down 23% to $313 million in 2020. Downloads accounted for only 6% of total recorded music revenues in 2020.

For the first time since 1986, revenues from vinyl records were larger than from CDs. Total revenues from physical products were virtually flat at $1.1 billion — down 0.5%. Despite the challenges to retail sales from COVID-19 restrictions, vinyl grew 28.7% by value year-over-year to $626 million. However, vinyl sales still only account for 5.2% of total revenues by value. Revenues from CDs declined 23% to $483 million, continuing a long-term decline.

RIAA • www.riaa.com

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