… while digital downloads fade and physical music media sales hold steady.
The music industry revenue reports issued annually by the Recording Industry Association of America (RIAA) are always interesting to look at, because they chronicle the big trends in how people are consuming their music.
The 2018 RIAA report is particularly enlightening, as it finds that streaming audio now accounts for three-fourths of all U.S. music industry revenue. With more than 50 million Americans subscribing to at least one streaming service, those revenue stats certainly make sense.
Moreover, the RIAA report states that 2018 revenues from streaming music platforms amounted to nearly $7.5 billion. That compares to just $1.1 billion (~11%) for digital downloads and $1.2 billion (~12%) for physical media sales.
Equally significant, streaming revenues account for nearly all of the revenue growth experienced across the entire industry – and the growth is dramatic. Streaming revenues jumped ~30% between 2017 and 2018, whereas growth in the other segments was essentially flat.
Within the streaming segment, all three major sectors – premium subscriptions, ad-supported on-demand streaming, and streaming radio – experienced revenue growth. But paid subscriptions continue to comprise the biggest chunk of revenue; they make up ~73% of all streaming revenues, or $5.4 million.
Ad-supported on-demand streaming is also proving to be quite popular with users, but while revenues grew by some 15% in 2018 to reach $760 million, it’s pretty clear that ad-supported streaming audio services lag behind in terms of generating revenues. Ad-supported streaming may account for more than one-third of all streaming activity … but only ~8% of streaming revenues.
The third segment — radio streaming services – looks to be a particularly bright spot. These services are evolving nicely, passing the $1 billion mare in revenues in 2018 for the first time.
But the main takeaway is this: Streaming audio now represents the “mainstream” while digital downloads are going the way of the cassette tape in an earlier era. And physical media (CDs, vinyl) have stabilized to a degree that many observers might not have anticipated happening just a few years ago.
More information from the 2018 RIAA report can be viewed here.
What are your own personal music consumption preferences? Feel free to share your thoughts with other readers here.