The RIAA just issued its mid-year report, and as almost always, there are surprises. Perhaps the biggest is that vinyl sales continue to grow at a rapid rate. On the other had, streaming is showing signs of plateauing, news that must send shivers down label execs everywhere.
Let’s get to the good news first. Vinyl sales rose by 22% in the first half of the year, with almost 22 million units sold. This brought in about $570 million, which accounts for about 10% of the recorded music revenue generated in the U.S. Despite facing numerous supply chain issues, the vinyl industry keeps growing, with current factories expanding and new ones coming online. Even so, the wait time for a release hasn’t changed much, with deliveries that stretch out as long as 9 months still being reported.
CDs weren’t so lucky, however. After a huge sales increase of almost 21% in 2021, they fell back down to earth in the first half of this year, decreasing by 2.2%. That’s not a lot, but it does return to a degenerative trend where the format has been losing its popularity every year.
Streaming revenue is bit worrisome however. The days of double digit growth appear to be over as the U.S. market added only 8 million subscribers for a 9.8% gain from last year at this time. Even more unsettling is that the average revenue per user fell to $50.09 from $50.31 a year earlier, according to Billboard.
If you take both of these numbers together, they don’t look too bad – average revenue per user down only a bit and streaming subscriptions still increasing. That fact is that the streaming market is slowing and, at least in the United States, the market appears nearing saturation. Yes, streaming revenues were up 10% to $7.7 billion, but there doesn’t appear to be a lot of room for growth at this point.
Considering that streaming accounts for 84% of the total revenue from recorded music, the scary part here is that we may nearly be topped out in terms total revenue. This is why you can expect prices to increase on streaming plans soon, as that’s the only avenue for similar large-scale growth in the business as we’ve just experienced.