Despite anxiety over a streaming slowdown, the US-based recording industry is still posting double-digit gains.
This is nowhere near the U.S. recording industry’s glory days of 1999-2000 when annual revenues were topping $20 billion — adjusted for inflation. But for an industry that almost got digitized out of existence, a $10 billion year is a lot to celebrate.
But can this pie keep growing?
According to stats just shared by the Recording Industry Association of America (RIAA), first-half recording revenues in 2019 jumped a strong 18% to $5.4 billion. Once again, streaming subscriptions stole the show, with every other format except vinyl continuing to plunge.
It’s important to note that last year, first-half year-over-year growth was 10%, on a smaller recorded revenue base. So there’s a lot to celebrate here.
Just a few years ago, the industry marveled when digital formats tipped the scales and started outselling physical. But tell that story in 2019, and you’re dating yourself: according to the RIAA’s latest first-half data, streaming now accounts of 80% of all recorded music sales, across all formats. That includes both paid subscriptions and ad-supported free accounts, with subscriptions driving a lion’s share of the revenue.
In total, streaming revenues ballooned 26% to $4.3 billion over the half, according to the stats. Last year, streaming accounted for 75% of the total recorded music pot.
In terms of paid subscriber growth, the RIAA says roughly 1 million new subscribers are joining services like Spotify, Apple Music, and Amazon Music a month.
Overall US-based streaming subscriptions now stand at 61.1 million, with Apple Music commanding the lead over Spotify in the States.
Now, the $10 billion question is how many new paying subscribers will enter the fold in the coming years.
Amazingly, vinyl LPs continue to grow, despite similar concerns of a slowdown — or, worse, a fading fad. Instead, the decades-old format continues to grow: during the first half, sales of LPs jumped another 6% to 8.6 million units. That equates to $224 million in retail sales volume, which accounts for a whopping 46% of total physical sales.
That’s just 4% of the total pie, with CDs (and perhaps a sprinkling of cassettes) accounting for another 5%. But physical sales are no longer plunging, and CD sales remained level over last year. That suggests that the shiny disc may have finally hit its bottom (at least until a Generation Z nostalgia boom hits).
For now, physical formats account for fewer than 10% of all recorded music sales in the U.S. Astounding when you consider that CDs once accounted for more than 95% of all recorded music sales. Which also helps to explain why the industry once enjoyed $20 billion in annual recorded music revenues.