Washington, DC (March 19, 2015)—The wholesale value of the American music business showed a modest 2 percent growth in 2014, while the overall retail value of the business dipped 0.5 percent, according to the annual report from the Recording Industry Association of America (RIAA).
Overall, last year marked the fourth straight year of wholesale growth, and the fifth straight year of essentially flat retail revenues, which are valued at $6.97 billion (down from a reported $7 billion in 2013). Industry revenue is now more balanced than ever before between physical, digital downloads and streaming. Downloads account for 37 percent of market value (down from 40 percent in 2013), streaming revenues grew to 27 percent from 21 percent the previous year, and physical product shrank to 32 percent from 35 percent.
In a blog post accompanying the report, Cary Sherman, chairman and CEO, RIAA, comments, “The music business continues to undergo a staggering transformation, one embraced by the music labels we represent. Record companies are now digital music firms, earning more than 2/3rds of their revenues from a variety of digital formats. Streaming services collectively are generating meaningful revenue: nearly $2 billion in 2014, a 29 percent percent increase over 2013.”
Paid subscriptions to U.S. services were up 26 percent year-over-year in 2014 and have tripled since 2011 to 7.7 million subscribers, with a value of $799 million. Ad-supported streaming accounted for an additional $295 million, up from $220 million in 2013. Between streaming, downloads and ringtones/ringbacks, digital music revenues accounted for a total of $4.51 billion, an increase of more than 3 percent from 2013.
Physical music sales continued to trend downward, falling nearly 6 percent to $2.13 billion in retail value in 2014. CD albums decreased 12.3 percent to $1.85 billion. At the same time, vinyl singles, EPs and albums continued on their strong upward trend, accounting for $320 million in total, compared with nearly $214 million in 2013.
Sherman’s statement concludes, “The music business is not without its challenges, but the foundations of a continued comeback are strong. Just look at the Internet and social media, for example, where artists and music drive the conversation like nothing else. Music is more relevant to commerce and culture than ever before. It is fundamentals like these that continue to give us great hope. Here’s to a bright future for music and everyone who creates it.”
RIAA report snapshot