RIAA Finds Music Industry Revenues Have Leveled Off
April 3, 2013 at 5:32 AM (PT)
The RIAA reports that although "revenues are still well below the highs of over a decade ago, total U.S. music industry revenues showed a second year of stabilization relative to the steep declines of prior years. Overall recorded music sales revenues for 2012 were $7.1 billion, down 0.9%, after a slight increase from 2010 to 2011.
In a study released YESTERDAY (4/2) the RIAA found that "Industry revenues from digital formats continued to grow, and in 2012 surpassed $4 billion for the first time ever, up 14.0% versus the prior year. Overall, digitally distributed formats comprised 59% of the total U.S. market by dollar value in 2012, after crossing the 50% threshold for the first time in 2011."
Digital growth was found to have been "driven by large increases in revenues through what can broadly be referred to as 'access models,' where users can choose to listen from large libraries of music rather than purchasing individual songs or albums. This category includes revenues from subscription services (such as RHAPSODY and paid versions of SPOTIFY, among others), streaming radio service revenues that are distributed by SOUNDEXCHANGE (like PANDORA, SIRIUSXM and other Internet radio), and other non-subscription streaming services (such as YOUTUBE, VEVO and adsupported SPOTIFY, which this year are included for the first time in this report)."
The proportion of total industry revenues from access models "have quickly become significant revenue contributors for the industry," notes the report. "Collectively, they went from just 3% of total industry revenues in 2007 to 15% in 2012, totaling over $1 billion for the year. Distributions for digital performance royalties from SOUNDEXCHANGE, which include payments to performers and copyright holders for webcasting, satellite radio, and other non-interactive digital music services, increased 58% to $462 million in 2012."
Overall, "Digital downloads, including albums, single tracks, videos, and kiosk sales were up 8.6% by value, from $2.6 billion in 2011 to $2.9 billion in 2012. Digital albums continued to grow, from $1.1 billion to $1.2 billion (12.5%) in 2012. Digital album volume of 116.7 million marked the second year in which the total exceeded 100 million. Digital albums accounted for 35% of all album sales by volume, up from 30% in 2011. Digital tracks also grew but at a slower pace, up in total value 6.7% from $1.5 billion in 2011 to $1.6 billion."
As for CDs, "after a more moderate decline in 2011, there was a significant decline in the physical market in 2012. Overall value was down 16.5%, from $3.4 billion in 2011 to $2.8 billion in 2012. Physical shipment volumes were down less at 11.7%, indicating a lower average price for music sales in physical formats. Vinyl though continued to grow, up 36% in value to $163 million in 2012, nearly equaling the total for ringtones, ringbacks, and other mobile products, but still only 2% of the overall market."