RIAA: Streaming, Wholesale Revenues Up, Digital Now 66% Of Total
March 18, 2015 at 11:58 AM (PT)
The annual RECORDING INDUSTRY ASSOCIATION OF AMERICA 2014 MUSIC INDUSTRY SHIPMENT AND REVENUE STATISTICS were released this morning, and to no one's surprise, digital formats now represent more than two-thirds of overall industry wholesale ($4.86 billion, +2% year-to-year) and retail ($6.97 billion, -0.5%) revenue. It's the fourth year in a row of growth at wholesale value.
Permanent downloads remained the largest component of industry revenue, representing 37% of total market value (down from 40% in 2013), while streaming revenue grew from 21% in 2013 to 27% in 2014. Physical shipment revenues shrank from 35% to 32%. Paid subscriptions rose from 6.2 million in 2013 to 7.7 million last year, with revenues growing 29% to $1.87 billion in 2014. That category includes subscription services (RHAPSODY, paid SPOTIFY), streaming radio services distributed by SOUNDEXCHANGE (PANDORA, SIRIUSXM) and other non-subscription on-demand services (YOUTUBE, VEVO, free SPOTIFY, etc.)
Although revenue from permanent digital downloads fell 8.7% to $2.58 billion, the growth from streaming services more than offset that decline. Total digitally distributed formats grew 3.2% to $4.51 billion, an all-time high, representing 66% of the retail market by value (minus Synchronization).
Full-length vinyl LPs continued their resurgence, growing 49% to $315 million, the first year since 1987 that vinyl LPs were a double-digit percentage of the physical market at 14%, representing 4.5% of the total market at estimated retail value.
On the whole, though, physical formats continued to decline in both total shipment volume and value, decreasing 7.1% in estimated retail value. CDs, representing 82% of the physical market, decreased 12.7% to $1.85 billion at retail value, comprising 27% of the overall market at estimated retail value.
RIAA Chairman/CEO CARY SHERMAN's remarks included harsh words directed at terrestrial AM and FM radio, urging them to "pay artists and labels for the use of their work," as well as digital radio companies like SIRIUSXM and PANDORA, who have refused to pay on pre-1972 recordings.
"Our mantra is fair market value for all creators, regardless of platform," stated SHERMAN, adding, "The music business is not without its challenges, but the foundations of a continued comeback are strong ... Music is more relevant to commerce and culture than ever before. It is fundamentals like these that continue to give us great hope."
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