The music industry is still a long way from its late ’90s heyday, but the Recording Industry Association of America’s midyear report shows the growth of streaming continues apace, with retail revenues up to $4 billion, 17% more than last year, while wholesale is up 14.6% to $2.7 billion.
With paid subscriptions rising to 30.4 million (up from 20.2 million in 2016), revenues from services like Spotify, Apple Music and Amazon are up to $1.7 billion, a rise of 61%, accounting for 43% of total revenue. Overall, streaming accounted for 62% of industry revenue, followed by digital downloads (19%), physical (16%) and synch rights (3%). Total value of digitally distributed formats in the first half of the year was $3.2 billion, up 21% from last year, contributing 84% of total industry value.
Physical product shipments decreased just 1% to $632 million, with CD revenue down 3% to $431 million, while vinyl continued its resurgence, up 3% to $182 million, comprising 29% of total physical shipments at retail value, their highest share since the mid-‘80s, when CDs quickly became dominant.
The results were consistent with the ones posted by the International Federation of the Phonographic Industry (IFPI), which reflected the global music industry, yesterday.
Commenting on the results, RIAA Chairman/CEO Cary Sherman remarked, “Our story continues to be one of great promise, but our footing is fragile, and a sustained, durable recovery is jeopardized by a fundamentally uneven playing field.”
With paid digital downloads steadily decreasing ($757 million, down 24% from last year’s six-month report) to a mere 19% of industry revenues (down from $1.5 billion at the six month mark in 2013), Sherman cites the contributions of record labels in spreading streaming, partnering with more than 400 services worldwide, pointing to the investment of $4.5 billion in “discovering, nurturing and promoting artists.”
Touching on figures showing the music industry leading the entertainment industry in digital distribution with a figure of 78%, topping video games (57%), movies/TV (40%), books (26%), magazines (27%) and newspapers (19%), Sherman points to the rise of paid streaming subscriptions, which went from 12% of revenues in 2014 to 30.1% last year, while ad-supported services rose only 3 perc3entage points from 4% three years ago to 7% in 2016.
Sherman then returns to the issue of the so-called “value gap” once again, pulling up figures that show an individual has to stream 58 hours of video on YouTube before generating a single dollar to music creators, concluding, “For the second half of 2017, we look forward to more great music, and hope that we can make more progressing on addressing fundamental inequities that stymie music’s full potential.”