Business

US Recorded Music Revenue Reaches $11.1 Billion in 2019, 79% From Streaming: RIAA

Taylor Swift and Billie Eilish
Kevin Mazur/Getty Images for Billboard

Taylor Swift and Billie Eilish attend Billboard Women In Music 2019, presented by YouTube Music, on Dec. 12, 2019 in Los Angeles.

Paid subscribers to on-demand services like Apple Music and Spotify's premium tier reached 60.4 million in 2019, up 29% over 2018.

The U.S. recorded music business generated $11.1 billion in revenue in 2019, according to the RIAA's annual year-end report, a 13% year-over-year increase from the $9.8 billion it reached in 2018. That represents the fourth straight year of double-digit growth for the sector, and a faster rate of growth over 2018, when it increased 11.9% over the prior year. (Sales were up 16.5% in 2017 and 11.4% in 2016.)

Unsurprisingly, that growth was driven largely by continued gains in streaming revenue, which grew 19.9% year-over-year to $8.8 billion from 2018's $7.4 billion, accounting for 79.5% of all revenue. That figure is also means that streaming revenue on its own was larger than the entire U.S. recorded-music sector in 2017, and higher than any year's total revenue since 2008, and was the first time streaming surpassed 3/4 of all revenue for the business.

Within overall streaming revenues, paid subscriptions accounted for $6.8 billion, up 25% year-over-year and making up 61% of the overall revenue total. That $6.8 billion is also itself larger than the entire U.S. recorded-music business in 2014 and 2015, the two years it bottomed out at $6.7 billion total from its 1999 peak. Limited-tier subscriptions — which includes services like Amazon Prime and Pandora Plus which do not provide full-catalog, unlimited on-demand access — accounted for $829 million of that total. Paid subscribers to on-demand services reached 60.4 million in 2019, up 29% over 2018’s 46.9 million, as subscriber growth and subscriber revenue continue to grow concurrently.

Meanwhile, ad-supported on-demand streaming also grew significantly, up 20% over 2018, yet it accounted for just $908 million in revenue. As the RIAA's report notes, "These types of services streamed more than 500 billion songs to more than 100 million listeners in the United States, yet contributed only 8% to total music revenues for the year." Digital and customized radio revenue was down 4% year-over-year to $1.16 billion, due to a 5% downturn in SoundExchange distributions ($908 million), while ad-supported streaming revenues remained flat at $251 million.

Apart from streaming, several numbers stick out in the sales model figures. For the first time since 2006, digital download sales revenue dipped below the $1 billion mark, falling 18% year-over-year to $856 million from last year's $1.04 billion. Album downloads dropped 21% to $395 million while digital track sales fell 15% to $415 million, as the overall download sector totaled just 8% of all revenues for the year. Album downloads accounted for 3.6% of revenues, while digital track downloads accounted for 3.7% of revenues, and ringtones still brought in $21.4 million, good for 0.2% of revenues.

Yet physical revenue largely remained stable, dropping just 0.6% year-over-year to $1.15 billion. CD sales continued to drop — though not as fast as digital sales — as they fell 12% to $615 million in 2019, with shipments dropping 10.5% to 46.5 million copies from the 52 million counted last year. But vinyl continued its victorious return, ballooning a whopping 19% year-over-year to $504 million, the format's highest revenues in 32 years and its 14th straight year of growth. CDs made up 5.5% of overall revenues, while vinyl accounted for 4.5%; average list price of a CD dropped to $13.21 in 2019 from $13.43 in 2018, while vinyl averaged $26.05, a jump from $25.10 the year before.

Overall, digital accounted for 87.2% of revenues in 2019, physical made up 10.3% of revenues and synch royalties accounted for 2.5% of revenues. In 2018, recorded-music revenue broke out to 85.4% digital, 11.7% physical and synchronization at 2.9%.

The RIAA's numbers represent U.S. recorded music revenue at retail, not the actual amount taken in by labels. According to the RIAA, wholesale revenue, the amount collected by record labels, grew to $7.3 billion in 2019, an 11% increase from the prior year's total of $6.6 billion. Prior year numbers shown here may vary from what was reported by Billboard last year, as the RIAA continually updates its data as new information becomes available.