A study just released by the RIAA shows bad and worse news for sectors of the recorded music business like physical media sales and digital downloads … but better and better news for streaming. And that’s the only news that matters when it comes to revenue for the music industry in the United States. Streaming grew 13% in 2019, from $9.8 billion to $11.1 billion in retail value, accounting for 79% of the overall pie.
An even more encouraging figure, perhaps, was the 25% year-over-year growth in revenue from paid streaming subscription services. That was up 25%, to $6.8 billion, with subscriptions now accounting for 61% of all the cash brought in from recorded music in the U.S.
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The actual number of paid subscriptions rose 29%, with 60.4 million in 2019, versus 46.9 million the year before. That’s 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.
Physical sales now account for just 10% of the marketplace. But some of the biggest shrinkage continues to be in digital downloads, which served for years as the bridge between CDs and streaming, but which now add up to just 8% of revenue. The download downfall between 2018 and 2019 was 18%. The RIAA pointed out that this was the first year since 2006 that the money brought in from paid downloads came in at less than a billion dollars.
The physical product decline was far less pronounced, just because it’s already been on the wet for so long. In fact, the slippage from 2018 revenue was just 0.6%, to $1.15 billion. The money brought in from CDs fell by 12%, to $615 million.
The reason the overall physical decrease was so negligible was due to — you guessed it — the vinyl boom. Maybe “boomlet” is a better term, given how minimal a part of the overall picture the LP market is… 4.5% of all revenue, to be exact. Still, vinyl was up 19%, to $504 million, the biggest annual number for LPs since 1988. 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.
The graph the RIAA is most excited to point to is the one showing revenue growth over the course of the previous decade. In 2009, it stood at $7.8 million, and it essentially flatlined for the first half of the last decade before making a precipitous rise these last few years to the last years $11.1 billion.
A blog from RIAA chairman/CEO Mitch Glazier released alongside the study said 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.”
There’s a levity amid all this bullishness, of course, as 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.
“Today’s report reflects the prospect of a future in which creators have a path forward,” wrote Glazier. “But it also reveals how much farther we must go to assure a healthy music community in which all music is valued and creators are fairly compensated. We still have not realized the full value of music on all digital services.
“Music is by far the biggest draw to tech platforms, gaining views and listens that generate enormous revenues for distributors, but in many cases this happens without an appropriate share for creators,” he continued. “Our technology partners also need to commit themselves to protecting and promoting artists’ work by doing more to stop stream-ripping and other forms of piracy. That requires the platforms to work more productively with the music community as partners to stop theft and respect the true value of music.”
But ongoing revenue growth in the double digits — whomever may be benefitting from it — certainly allowed the statement to end on a high note.
“As we continue to work to meet these challenges,” Glazier concluded, “it is worth taking this moment to reflect on what we have accomplished: by investing in a vibrant music culture of diverse voices, music companies have driven a fourth consecutive year of double digit growth and continued to build a digital-driven industry with a focus on the future. We are working in partnership with the entire music community to provide expanded opportunities for both artists and fans and keep the heart of American culture beating for another generation.”