Music Industry Sales Jump 18% on Streaming Growth
In the first half of 2019, retail revenues in the U.S. market for recorded music rose by 18% to $5.4 billion, compared with revenues of $4.6 billion in the first half of 2018. Paid subscriptions (think Spotify and Apple Music) accounted for 62% of all U.S. revenues and 77% of all streaming revenues in the first six months of 2019.
The music industry’s main professional organization, the Recording Industry Association of America (RIAA) reported the data Thursday.
The number of paid streaming subscriptions rose from 46.9 million in the first half of last year to 61.1 million. The new total represents growth of more than a million new paid subscribers every month for the past 12 months.
Subscription revenues rose by nearly 30%, from $2.2 billion last year to $2.85 billion in the first half of this year. Ad-supported on-demand streaming revenues rose from $343 million a year ago to $427 million, a boost of nearly 25%. Limited tier subscriptions (think Amazon Music and Pandora Plus) rose just over 39% from $345 million to almost $482 million. Including other retail revenues, streaming accounted for $3.41 billion of the music industry’s first-half revenues or 63% of total sales.
Sales of digital downloads (think iTunes) dropped by 16.4% to $225.6 million for singles and by 22.5% to $205.6 million for albums. Including all of what the RIAA calls the digital permanent download category, sales fell nearly 18% to $461.6 million in the first half of this year.
Revenue from sales of physical compact discs was up less than 1% year over year at $247.9 million, and sales of vinyl rose nearly 13% from $198.6 million to $224.1 million. Music video sales fell more than 26% to $9.3 million, and sales of other physical formats fell 16% to $3.8 million. All told, unit volumes dropped by 0.8% in physical format sales, but revenue increased by 5.1% to $485.1 million.
In 2005, the first year that paid streaming subscriptions appeared on the RIAA’s sales charts, industry revenues totaled $12.3 billion. Paid streaming accounted for just $149.2 million (1.2% of the total), compared to $10.5 billion in CD sales (85.3% of the total) for the year. Ten years later, paid subscriptions accounted for $1.2 billion in sales, about 18% of annual total revenues of $6.7 billion, and CDs comprised 21.5% of sales for $1.4 billion in revenues.
The RIAA recently sent a letter to the U.S. Department of Commerce responding to the department’s request for comments on the state of counterfeit and pirated goods trafficking by online third-party marketplaces. The industry’s central plea is to make marketplaces such as Amazon, eBay and Alibaba responsible for verifying the authenticity of goods sold on their sites.