Things might not exactly be returning to normal, but the record business can take some comfort in the fact that the long industry-wide slide appears to have reached ground level, as the RIAA reported a second consecutive year of relative stability in its annual shipment and revenue report, issued today.
According to the report, recorded music revenues in 2012 topped out at $7.1 billion, representing a marginal 0.9% yearly decline after an even more marginal increase last year. This steadiness comes after years of steep downward trajectory, and represents the continuing ability of digital revenues to offset physical declines.
Indeed, digital revenues passed the $4 billion mark for the first time in 2012, an increase of 14%, and accounted for 59% of the total recorded music market, a substantial proportional increase from last year’s 51%.
Of particular note is the increase in revenue from what the RIAA refers to as “access models,” which encompass subscription services like Spotify and Rdio, Internet and satellite radio such as Pandora and SiriusXM, and ad-supported sites YouTube and Vevo. This category accounted for 15% of total industry revenue last year, up from 9% in 2011, and a mere 3% back in 2007.
Among other digi models, digital downloads were up 8.6% to $2.6 billion, with digital album sales in particular increasing 12.5%. As is to be expected, physical revenues continued to slide at an even greater degree than last year, dropping 16.5% to $2.8 billion overall. Vinyl sales were the only physical category to experience positive movement, growing 36% while still only repping 2% of total industry revenue at $163 million.