The music industry is on a new high after seeing their retail revenues grow 11.4% in 2016.
According to a new RIAA report, that is the biggest percentage gain since 1998 although they cautioned that, while growing, overall revenue is only about half of what it was in 1999.
In addition, at the wholesale level, revenue was up 9.3%.
The report also showed what a new day it is for methods of music consumption. For the first time ever, revenue from streaming made up over 50% of the revenue, up from 34% in 2015. To show the immense growth of the market, just six years ago, streaming was only 9% of the marketplace.
Streaming – 51.4%
Digital Downloads and Ringtones – 24.1%
Physical (CDs, Vinyl) – 21.8%
Synch – 2.7%
For those that still love physical formats, this report also shows that there is a bit to be grateful for. For a number of years, digital downloads were leaving physical product in the dust with double digit growth. That has not only slowed, but actually reversed where downloads now only lead CDs and vinyl by less than 3% of the marketplace.
Year-to-year, digital download revenue was down 22% (24% for individual tracks, 20% for albums). Physical product was down 16% but here is where things get interesting. Revenue for CDs was down 21% and made up 70% of the marketplace but shipments of vinyl albums up 4% and they now make up 26% of the physical music market! That’s the highest percentage for vinyl since 1985.
In the realm of streaming, the record companies are finally getting what they wanted with paid subscriptions more than doubling in 2016, going from $1.16 billion to $2.48 billion (actual subscriptions jumped from 10.8 million to 22.6 million). In comparison, On-Demand Ad-Supported streams (free Spotify, YouTube) only grew from $373 million to $469 million.
You can see the full RIAA report here.
