Streaming Is Music To Music Biz Ears: Revenue Up Almost 17%

2017 Was A Very Good Year

The RIAA reported that U.S. recorded music sales climbed almost 17% to a little over $8.7 billion in 2017, its second straight gain in domestic revenue and the fastest growth in 23 years. Leading the surge were streaming services such as SPOTIFY and APPLE MUSIC -- notably their subscription services.

The subscription services fueled a 63% revenue increase to $4.09 billion. That comprises almost two-thirds of industry's entire revenue. Revenue from free ad-supported streaming from the likes of YouTube and Spotify’s free tier grew to rose almost 35% to nearly $659 million.

Taking a major hit was digital sales, as download revenue dropped almost 25% to $1.33 billion. Download track sales fell over 25% in units and revenue; download album dropped 22% in units and almost 24% in revenue. That, added to the streaming revenue, comprises 80% percent of total revenue for 2017.

Elsewhere, physical album sales fell 3.7% in revenue, selling 87.6 million units. The infinitesimal bright spot: Vinyl sales were up less than one million units to 15.6 million

MUSIC BIZ Pres. JAMES DONIO offered his take on the state of the industry:

“U.S. recorded music revenues continued their streaming-fueled growth in 2017, rising 16.5% to $8.7 billion, according to the RECORDING INDUSTRY ASSOCIATION OF AMERICA’s (RIAA) newly released figures. It’s the first time in nearly two decades that revenue substantially increased two years in a row, and was driven by the continuing explosion of streaming services. In fact, streaming platforms accounted for nearly two-thirds of all U.S. industry revenue with $5.7 billion, up 43%. That milestone was powered by a massive 63% bump in revenue from paid music subscriptions, which hit $4 billion for the first time ever and asserted their dominance over all other formats with a whopping 47% of all industry revenues. This growth was pushed by the introduction of new subscription services, as well as the continuing success of established products, with the increased attention on the format driving the number of paid subscriptions to full on-demand services up 56% to 35.3 million. Ad-supported streaming services also kicked in more revenue in 2017, rising 35% to $659 million, and limited-tier subscriptions also grew 11%, accounting for 14% of the overall subscription market. The physical space continued to demonstrate resilience, surpassing digital downloads for the first time since 2011 with $1.5 billion in revenue. The growth of vinyl remains the physical sector’s bright spot, with revenue up 10% to $395 million. These numbers continue to show that while formats are evolving, the appetite for music in the U.S. remains strong and healthy.”

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