In the first half of 2019, the U.S. recorded music business grew 18% to $5.4 billion at retail, according to the Recording Industry Association of America’s (RIAA) mid-year report published Thursday (Sept. 5).
That overall growth is up from a 10% increase reported in last year’s mid-year analysis and continues the trend of double-digit growth driven by subscription streaming that began in 2016. In the same report last year, streaming made up for 75% of total industry revenues, showing a 6.7% uptick in the format’s overall dominance to the current 80% market share reported here.
Streaming revenues grew 26% to $4.3 billion over the six months period, accounting for 80% of industry revenues. An average of more than 1 million new subscriptions each month contributed to that, with total paid subscriptions across the country now reaching 61.1 million.
As well, physical product net revenues actually increased over the first half of the year, bucking recent trends to grow 5% to $485 million — accounting for 9% of the industry total for the period. That growth was, however, a result of the reduction in physical product returns and on a gross basis the revenues would have been down over the period. Vinyl album sales continued to improve, rising 13% to $224 million, making up 46% of total physical revenues but just 4% of total revenues in the first half of 2019.
Meanwhile, digital sales continued to decline, falling 18% in the first half of 2019 to $462 million, amounting to just 8.6% of total industry revenues. Individual track sales revenues decreased 16% year-over-year and digital album revenues dropped 23%.
Breaking down streaming revenues, paid subscriptions on services such as Spotify and Apple Music grew 31% year-over-year, boosting subscriptions revenue to $3.3 billion — 77% of total streaming revenues and 62% of the overall industry revenues in the first half of the year. Included in that total are “limited tier” paid subscriptions for services like Amazon Prime and Pandora Plus, which brought in $482 million in revenues on their own and experienced even greater growth than the larger paid subscription pool — up 39% since the same time last year.
Advertising-supported on-demand streaming revenues also grew, up 25% year-over-year to $427 million. But, as the report notes, that revenue from services like YouTube, Vevo and Spotify’s free tier made up only 10% of overall streaming revenue, while accounting for hundreds of billions of song streams in the first half of the year.
Digital and customized radio revenues from services such as SiriusXM and internet radio stations, as well as payments directly paid by other ad-supported services, were $552 million in this time period — up 5% from the same time last year.
RIAA chairman and CEO Mitch Glazier celebrated the industry’s growth in a blog post, noting, “It’s great news for the music business and for the US economy overall. Music contributes $143 billion to the nation’s GDP every year, supporting more than 157,000 music-related businesses and nearly 2 million jobs. A healthy music economy fuels a healthy American economy.
“Our mid-year report tells a great story and highlights how the music industry’s embrace of new platforms and technologies has fueled a huge amount of growth and excitement — and a gusher of great new options for fans everywhere.”
He also noted this success is the result of labels’ work to build tools and teams to help navigate the globabl streaming ecosystem, while “fighting to shut down industrial piracy and stream-ripping operations or standing up to Big Tech platforms that have avoided accountability to exploit artists and grossly underpay for music.”
He concluded, “And more than anything, it’s a reminder of what we can accomplish when the whole music community — and our music service partners — work together. Collaboration and cooperation work. We’ve proven that by establishing the right to be paid for streaming in the early days of the internet, to the technical and data collaboration that made modern music services possible, to even more recent problem solving like the Music Modernization Act that finally won justice for artists who recorded before 1972.”