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U.S. Music Industry Generated $9.8 Billion in 2018, Third Straight Year of Double-Digit Growth: RIAA

The U.S. music industry grew 11.9 percent to $9.846 billion in 2018 from the $8.797 billion tallied in 2017, thanks to continuing explosive growth from streaming, which jumped 30.1 percent to $7.37 billion from the prior year’s total of $5.66 billion.

This marks the third consecutive year of double-digit growth for the industry, as music sales were up 16.5 percent in 2017 and 11.4 percent in 2016.

Driving streaming’s growth, according to figures released Thursday by the Recording Industry Association of America, was a 42.4 percent increase to 50.2 million in paid subscribers from the 35.3 million subscribers counted for 2017.

Within streaming, on-demand models dominated revenue contributing nearly $6.163 billion, a 29.7 percent increase over the prior year’s total of $4.751 billion in the prior year; while programmed streaming and satellite broadcasts totaled $1.204 billion, up 28.9 percent from $934 million in the prior year. These totals include SoundExchange distributions as designated in the RIAA press release, as well as direct payments to labels from services like Pandora.

Trailing in revenue growth, on-demand ad-supported streaming — i.e. YouTube and Spotify — only grew 15.3 percent to $759.5 million from the prior year’s total of $658.6 million.

Meanwhile, the heritage formats of downloads, CDs and vinyl didn’t fare as well. Downloads fell 26 percent to $1.04 billion from the prior year's total of $1.4 billion, with track downloads leading the decline falling to 400 million downloads, and $490.4 million in revenue from 553.5 million downloads and $678.5 million in the prior year; with both being down about 27.8 percent. Album downloads also declined to just under 50 million units from 66.4 million in the prior year, which means that revenue dropped to about $500 million from $668.5 million, about a 25.2 percent decrease for units and dollars.

Despite the eroding demand for the download format, pricing remains stable with the average track download coming in at $1.23 in both years and the album down a few ticks to $10.05 from $10.07 in the prior year.

Other digital revenue, i.e. ringtones and kiosk sales, fell to $12.2 million from $17 million in the prior year, 

Overall, digital revenue grew because streaming's growth continues to outpace the download decline with total revenue at $8.405 billion, a 18.9 percent increase from the $7.07 billion tallied in 2017.

Meanwhile synchronization also had a strong year, growing 23 percent to $285.5 million from $232.1 million.  

The big loser in the format was last year was the CD, likely due to returns. Overall, net CD sales totaled 52 million units, down a whopping 40.7 percent from the 87.7 million in the prior year. While actual CD sales at the store level may have been larger than the RIAA shows, when returns are taking into account, it magnifies the format’s decline. Revenue wise, CD sales fell to just under $700 million from nearly $1.06 billion in the prior year, a 33.9 percent decline.

Meanwhile, the darling format of the indie music fan, vinyl enjoyed 7.2 percent in growth to 16.7 million units, up from 15.6 million unit in the prior year, while corresponding revenue grew to $419.2 million from $388.5 million, a 7.9 percent increase.

Overall U.S. recorded music revenue now breaks out to 85.4 percent digital; while physical is 11.7 percent and synchronization at 2.9 percent.

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Source: Billboard


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