-
RIAA Mid-Year Report: Streaming Up, But Revenues Down 2.5%, Retail Off 4.9%
September 25, 2014 at 12:10 PM (PT)
What do you think? Add your comment below. -
The RIAA's 2014 Mid-Year Shipment And Revenue report found strong growth in streaming-service revenue that offset declines in digital downloads, but overall revenues were still down 2.5% to $2.2 billion at wholesale value on a year-over-year basis. At retail, the decrease in value was nearly 5% to $3.2 billion..
Streaming music services grew 28% in the first half of 2014 to $859 million, versus $673 million for the first half 2013. This includes revenues from subscription services (such as RHAPSODY and paid versions of SPOTIFY, among others), streaming radio service revenues that are distributed by SOUNDEXCHANGE (such asPANDORA, SIRIUSXM and other Internet radio outlets) and other nonsubscription on-demand streaming services (such as YOUTUBE, VEVO and ad-supported SPOTIFY). These streaming services contributed 27% of total industry revenues over the first six months of 2014, compared with 20% for 2013. The growth in revenues from streaming services offset the entire decline in revenues from permanent downloads for the first half of 2014.
Paid subscriptions grew to $371 million, up 23% on a value basis, but grew at an even more rapid pace of 43% by number of subscriptions. This difference is partially due to an update in RIAA’s retail price markup estimate. On-demand ad-supported streaming services grew 57% to $165 million for the first half of 2014, and SOUNDEXCHANGE distributions grew 21% to $323 million. Combined, those two categories accounted for 57% of total streaming revenues for the first half of 2014.
The total value of digitally distributed formats was $2.2 billion -- virtually flat compared to last year. Digital accounted for 71% of the overall market by value, compared with 68% for 1H 2013 (Synchronization excluded from this figure). Historically, this percentage has decreased in the second half of the year due to seasonality.
Revenues from permanent digital downloads (including albums, single tracks, videos and kiosk sales) declined 12% to $1.3 billion for the first half of 2014. There were 54.3 million digital albums sold, down 11% vs. 61.3 million in the first six months of 2013. Total value of digital albums was $544 million, down 14% vs. the same period the prior year. Digital track sales volume was down 9% to 644 million, and the total sales value of tracks was down 11% to $753 million.
Total sales in physical formats were $898 million, down 14% versus a comparable period last year. CDs made up 80% of total physical shipments, and vinyl -- which was up 43% by value for the first half of the year -- accounted for 16% of the total by value. CD sales were down almost 20% (19.1%) from last year at this time.
Revenues from Synchronization royalties were $88 million for the first half of the year, down 10% from last year.
The data for the first half of 2014 shows streaming music services continuing to grow in importance, with 27% of total revenues coming from access models – nearly equal
to the 28% accounted for by physical products.