The hits just keep on coming. The RIAA mid-year revenue numbers, released Thursday (Sept. 20), show impressive growth of 10 percent to $4.6 billion in retail value compared to the first half of 2017. That continues a trend of double-digit growth, driven by subscription streaming, that began in 2016.
Here are five more takeaways from the report.
1. It’s a streaming world
Streaming now represents 75 percent of revenue. It accounted for $3.4 billion of the recorded music industry’s $4.6 billion of revenue. At this time last year, it accounted for 62 percent of the business.
2. Growth spurt
The growth of streaming is incredible. The format accounted for just $1 billion of revenue in the first half of 2015 and the business made almost as much from streaming during the first half of 2018 as it did from all formats during the first half of 2016. Growth in revenue from paid streaming is even more impressive: It’s up 36.5 percent.
3. Will the good times last?
The 10 percent overall growth is less than last year’s 17 percent and double-digit increases can’t last forever. The U.S. now has 46.4 million subscriptions to paid music services and, in a country of 126.22 households that once accounted for roughly 100 million pay television subscriptions in various formats, it seems hard to believe that more people will pay for music than television. But it also once seemed hard to believe that the business could account for more than 50 million subscriptions in the U.S.
As well, paid subscriptions grew by 47.6 percent, while the revenue they generated only grew 36.5 percent — suggesting that many customers were lured in by discounts and revenue will rise if and when they start paying the normal rate.
4. Vinyl will have its revenge!
Vinyl keeps growing — LPs and EPs accounted for $198.6 million in the first half of 2018, up 12.8 percent from the same period of 2017. During the same period, CD sales fell 41.5 percent to $245.9 million. If current trends continue, revenue from vinyl could eventually make up more than half the physical music business. CDs still sold far more copies, however — 18.6 million compared to 8.1 million.
5. Downloads are (still) going down
CD sales are declining faster than downloads, at least partly because there’s less shelf space devoted to the format, but total download revenues (for singles, albums and ringtones) fell 26.5 percent to $562.2 million. That’s not much bigger than the physical market, which accounted for $461.6 million in revenue.