Covid didn’t keep the recorded music industry down last year as revenue was up more than 9% to around $12 billion. That marks the 5th straight year of growth for the industry. While it may signal happy days in the label corporate offices, it’s still down from the industry’s top level of $14.6 billion in 1999, but it’s getting slowly getting back to that peak.
According to the latest year-end report by the RIAA for 2020, streaming accounted for a little more than $10 billion of the total revenue, or a full 83%. Physical product still makes up a significant amount of income at 9% or $1.1 billion. Surprisingly, that hasn’t changed much over the last 3 years as it’s down just 0.5% from last year.
Not Everything Did Well
One format that continues its rapid decline is digital downloads. While it still accounts for 6% of the total industry revenue at $674 million (who’s still downloading? We’d all like to know), this amount fell another 18% from the previous year. Permanent downloads of albums also fell 13% by value to $320 million, and individual track sales were down 23% to $313 million in 2020.
But Streaming Rules
Looking back at streaming, this category includes paid subscription services like Spotify, Apple Music, and Amazon Music Unlimited, ad-supported on-demand services such as Vevo, YouTube and the free version of Spotify, and digital and customized digital radio like Pandora, SiriusXM, and other Internet radio services. The streaming category for the first time includes music license revenues from Facebook and streaming fitness services.
That said, paid subscriptions to on-demand streaming services are at the heart of the streaming revenue increase, and these subs grew by $14.6% up to $7.0 billion. Many wonder whether streaming subscriptions have hit the saturation point, but that’s not indicated in the numbers.
The recorded music industry is healthier that it’s been in quite a while, and if similar year-on-year growth continues, it will soon reach that magical $14 billion mark in just a couple of years. At that point, maybe finally all the doomsayers that said that streaming would never out-earn physical will finally put their argument to bed.