Washington, DC (September 9, 2019)—According to the mid-year industry revenue report released by the Recording Industry Association of America (RIAA), the US recorded music market continues to enjoy double-digit growth, driven by paid streaming subscriptions and a small bump in physical format sales.
Total music revenues grew 18% to $5.4 billion at retail in the first half of 2019, fueled in large measure by the 26% increase in streaming revenues. Indeed, streaming has reshaped the music business, with paid subscriptions now accounting for 62% of overall industry revenues. Paid subscriptions contribute 77% to the total US streaming music revenues. The category’s 31% year-over-year growth pushed total subscription revenues to $3.3 billion.
The RIAA’s streaming category includes revenues from subscription services (such as paid versions of Spotify, TIDAL, Apple Music, Amazon, and others), digital and customized radio services including those revenues distributed by SoundExchange (like Pandora, SiriusXM and other internet radio), and ad-supported on-demand streaming services (such as YouTube, Vevo and ad-supported Spotify).
As has become his tradition, Mitch Glazier, chairman and CEO, RIAA, issued a blog post to coincide with the report on Medium. “It’s great news for the music business and for the US economy overall,” he wrote. “Music contributes $143 billion to the nation’s GDP every year, supporting more than 157,000 music-related businesses and nearly 2 million jobs. A healthy music economy fuels a healthy American economy.
In the RIAA’s three-page report, digital downloads and physical products are almost an after-thought. The continuing decline in digital sales, falling 18% in the first six months of 2019 to $462 million, partially offset streaming’s revenue growth. Individual track sales revenues were down 16% year-over-year, while digital album revenues dropped 23%. Overall, the category contributed just 8.6% to the industry’s total revenues.
As it turns out, digital sales are now outstripped by sales of physical products, which grew 5% to $485 million, or 9% of the industry total for the period. The report notes, however, that this was due to a reduction in physical product returns. Sales of vinyl albums grew 13% to $224 million — and if that trajectory continues will likely overtake CD sales before long — yet accounted for only 4% of total revenues.
According to Glazier, record companies are plowing more money than ever into discovering and promoting new talent: “Worldwide, labels now spend nearly $6 billion a year to find talent, enable artists to record, cut through the noise, and be heard. Finding and developing new talent is the lifeblood of the business, with 20% of a major label’s roster of artists signed fresh each year.”
Beyond the unit sales figures and percentages, Glazier observes, “Music continues to be a key driver of internet culture, and engagement around music and artists powers much of the popularity of many social media and technology platforms. On social media, musicians are among the most-followed users worldwide.”
Glazier finishes on a positive note with a comment on the passing of the Music Modernization Act, which, among other things, closed a loophole in federal copyright protections, enabling artists who recorded before 1972 to receive royalties for digital radio plays.
Recording Industry Association of America • www.riaa.com
Download the report: www.riaa.com/wp-content/uploads/2019/09/Mid-Year-2019-RIAA-Music-Revenues-Report.pdf