Here’s How Crucial Streaming Is to Music Revenue
Backed by continually strong streaming growth, the recorded music business saw double-digit growth for the fourth consecutive year in 2019, according to data from the Recording Industry Association of America’s annual revenue report released on Tuesday. Streaming making up an entire 80% of the U.S. industry’s revenue.
Recorded music revenue as a whole jumped 13% from 2018, totaling $11.1 billion. Paid subscription services made up the bulk of streaming revenue, with ad-supported streaming and royalties from SoundExchange also contributing to streaming’s dominance. Paid streaming subscriptions jumped to 60.4 million in 2019, up from 46.9 million the year before, the report said.
Digital downloads and physical sales continued to fall in 2019. While vinyl sales have grown for the 14th consecutive year, reaching over $500 million last year according to the report, physical sales as a whole were slightly down from 2018 as CD sales continue to plummet. CDs still made up nearly 54% of physical sales last year, but the gap between vinyl and CD revenue continues to close as vinyl’s resurgence is yet to stop. Digital song and album downloads fell 18% in 2019 to $856 million; this marks the first time digital downloads were sub-$1 billion since 2006. Physical sales made up 10% of revenue last year, digital downloads sat at 8%.
As older purchasing methods like physical sales and digital downloads drop, streaming has further cemented itself has the preeminent revenue driver in the music business as a whole; just Spotify and Apple Music alone accounted for 27% of Warner Music Group’s total revenues in 2019, according to the major label’s recent Initial Public Offering filing.
RIAA Chairman and CEO Mitch Glazier said in a statement that the strong revenue numbers reflect an industry that is adjusting well to the digital age. “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,” Glazier said.
Glazier went on, however, to call out tech platforms to do a better job to combat music piracy, which he said still limits overall ability to properly value music.
“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,” Glazier said. “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.”