Vinyl Sales Soar — and Even CDs Rebound — as U.S. Recorded Music Industry Posts $15 Billion Year-End Revenue

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The U.S. recorded-music business continues its upward swing, posting a near-record $15 billion in revenue for 2021, driven by a surge in streaming, solid vinyl and even CD sales, and the inclusion of TikTok music revenue for the first time.

In fact, all major formats of music posted growth over the prior year, except digital downloads. Paid subscriptions continued to be the biggest growth driver, resulting in the sixth consecutive year of growth for music revenues. At wholesale value, 2021 revenues were up 22% to $9.8 billion.

While the $15 billion number is itself a record, when adjusted for inflation, it’s actually nearly 40% lower than the previous record of $14.6 billion in 1999.

Streaming — a wide category that includes paid subscriptions, ad-supported music streaming services, digital and customized radio, licenses for music on Facebook and digital fitness apps, and for the first time, U.S. TikTok music revenues — was by far the biggest driver, growing 24% over 2020 to $12.4 billion and accounting for 83% of total revenues – a similar level to 2020.

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Courtesy RIAA

Within that, revenues from paid subscriptions continued to account for the lion’s share of revenues, and grew 23% to $9.5 billion in 2021. They accounted for nearly two-thirds of total revenues, and 76% of streaming revenues. This total includes $907 million in limited-tier subscriptions (services limited by factors such as mobile access, catalog availability, product features, or device restrictions), which is 26% higher than for 2020. Services like Amazon Prime, Pandora Plus, music licenses for digital fitness apps, and other subscriptions are included in this category.

The number of paid subscriptions to on-demand music services continued to grow at double digit rates in 2021. The average number of subscriptions for the year grew 11% to 84.0 million, compared with an average of 75.5 million for 2020. From 2019 to 2021, the average number of paid subscriptions grew 39%, while paid subscription revenues grew 40% over the same two-year period. These figures exclude limited-tier services, and count multi-user plans as a single subscription.

Revenues from advertising supported on-demand streaming (through services like YouTube, the ad-supported version of Spotify, Facebook, and Tik Tok) rebounded from slower growth in 2020, when the Covid-19 outbreak significantly impacted advertising revenues across many forms of media. This category grew 47% in 2021 to $1.8 billion, compared with 18% growth and $1.2 billion in revenue in 2020. Revenues from digital and customized radio services grew 4% to $1.2 billion in 2021. The category includes SoundExchange distributions for revenues from services like SiriusXM and Internet radio stations, as well as payments directly paid by similar services, included in this report as “other ad-supported streaming”. SoundExchange distributions grew 5% to $993 million in 2021, while other ad-supported streaming revenues of $209 million were down 1%.

For the first time since 1996, both CDs and vinyl records experienced revenue growth in the same year. The resurgence in vinyl records continued for the 15th consecutive year, as revenues grew 61% to $1.0 billion in 2021. The last time vinyl records exceeded $1 billion was 1986. Vinyl accounted for 63% of revenues from physical formats, and 7% of total music revenues. Revenues from CDs rebounded from 2020, when Covid-19 significantly impacted retail as many stores were closed and tours were suspended or canceled. In 2021, revenues from CDs grew 21% to $584 million, the first year-over-year increase in CD revenues since 2004.

Finally, while physical product accounts for just 11% of the industry’s total revenue, vinyl enjoyed its 15 th straight year of growth, soaring 61% to $1 billion in 2021. Even CDs, which last year were overtaken by vinyl for the first time since the 1980s, saw a healthy 21% boost to $584 million, the first year-over-year increase in CD revenues since 2004.

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Courtesy RIAA

“The incredible run of strong, industry-wide growth documented in this and prior reports speaks to the dynamic and vibrant creative and commercial relationships today’s labels have built with their artist partners,” said the RIAA’s Mitch Glazier. “Labels haven’t simply reinvented themselves, they have helped transform the entire process of music creation, discovery, and distribution to bolster creative freedom and artistic expression while seamlessly meeting fans everywhere and anywhere they want to be. The result has been an incredibly vibrant period delivering new opportunities, platforms, and experiences – from music-powered fitness apps to gaming platform livestream concerts to must-have vinyl exclusives to global surprise digital album drops. Creative genius unleashed in new ways driving shared commercial success and record payments to artists.

“No industry in history has embraced changing technologies and innovations faster than music over the last ten years – taking streaming from novelty to ubiquitous in the blink of an eye and now working to drive a new generation of social apps, shared immersive experiences, and blockchain/NFT opportunities going forward.”