The CD used to be the king of all music product back in the early 2000’s, but the mighty have fallen greatly as vinyl has surpassed it in revenue for the first time in 30 years. This according to the RIAA’s 2020 Mid-Year Report, which showed that vinyl sales not only surpassed CD sales, but by a lot as well.
In the first half of 2020, vinyl sales accounted for $232.1 million, up 3.6% year over year, which was way beyond the $129.9 million generated from CD sales during that period. Given that we’re in the middle of a pandemic, it’s actually hard to believe that the sales for any physical product were even that high, but vinyl sales appear to be doing well online but the same can’t be said for CDs.
The surprising part was that last year at this time, CDs were doing rather well in that the sales we equal to the year before. That defied the revenue slippage that the format has sustained over the last 10 years or so, as streaming has become the music consumption format of choice.
Streaming Is King
And speaking of streaming, it accounted for 85% of the industry’s revenue during the first half of the year, according to the report. That said, the growth of the format has slowed quite a bit, from double digits in previous years, to just 5.6% this year so far.
While some of the decline can be attributed to the pandemic, there have been signs and predictions that streaming growth would be slowing by this time. There’s a point of saturation of paid streaming subscribers coming up quickly, especially in countries that have had streaming as part of the music consumption pattern for a while.
Couple that with the fact that ad-supported streaming numbers have taken a big hit thanks to the pandemic (what advertisers are willing to pay for ads is way down), and we can see that even though times are good in the music business, we may be approaching a new status quo.