Streaming services like Apple Music dominate music industry revenue
Apple Music and other paid subscriptions are now the biggest source of revenue in a growing music industry, with streaming alone encompassing 75 percent of money earned, far beyond any other contributor.
According to the 2018 Mid-Year Music Revenues Report, released this week by Recording Industry Association of America (RIAA), the U.S. music industry saw an increase in overall revenues. Those revenues rose to $4.6 billion in the first half of the year, up from $4.2 billion the same time in 2017.
Three-quarters of the industry's revenues in the first half of 2018 came from streaming, compared to digital downloads at 12 percent and physical sales falling to 10 percent. Meanwhile, streaming revenues grew to $3.4 billion in the first six months of the year, a 28 percent jump over 2017.
Of those revenues, RIAA said, $2.55 billion came from paid subscriptions to Apple Music, Spotify, Tidal and others, although the association did not break out the different services. The $2.55 billion figure is an increase from $1.9 billion in the first half of 2017 and $1.1 billion the first half of 2016.
Apple Music reportedly overtook Spotify as the top subscription streaming music service in the U.S. in July.
There are now a total of 46.4 million paid music subscriptions in the U.S., up from 31.5 million a year ago and 20.3 million two years ago, the RIAA said. At the same time, as business models have shifted, U.S. digital download revenues have plummeted to $562 million in the first half of this year from over $1 billion two years ago.
In the full year of 2017, streaming contributed 65 percent of the industry's revenue, RIAA said earlier this year.
In its new report, RIAA recognized that even with the streaming success, the industry faces challenges.
"Finding an audience amongst an extraordinary range of music choices, competing for the user's attention against other entertainment options on the ubiquitous smartphone, and being prominent on dozens of different digital platforms is not only critical for success, those are attributes that uniquely reside within today's record company," Mitch Glazier, RIAA's president, said regarding the results.
According to the 2018 Mid-Year Music Revenues Report, released this week by Recording Industry Association of America (RIAA), the U.S. music industry saw an increase in overall revenues. Those revenues rose to $4.6 billion in the first half of the year, up from $4.2 billion the same time in 2017.
Three-quarters of the industry's revenues in the first half of 2018 came from streaming, compared to digital downloads at 12 percent and physical sales falling to 10 percent. Meanwhile, streaming revenues grew to $3.4 billion in the first six months of the year, a 28 percent jump over 2017.
Of those revenues, RIAA said, $2.55 billion came from paid subscriptions to Apple Music, Spotify, Tidal and others, although the association did not break out the different services. The $2.55 billion figure is an increase from $1.9 billion in the first half of 2017 and $1.1 billion the first half of 2016.
Apple Music reportedly overtook Spotify as the top subscription streaming music service in the U.S. in July.
There are now a total of 46.4 million paid music subscriptions in the U.S., up from 31.5 million a year ago and 20.3 million two years ago, the RIAA said. At the same time, as business models have shifted, U.S. digital download revenues have plummeted to $562 million in the first half of this year from over $1 billion two years ago.
In the full year of 2017, streaming contributed 65 percent of the industry's revenue, RIAA said earlier this year.
In its new report, RIAA recognized that even with the streaming success, the industry faces challenges.
"Finding an audience amongst an extraordinary range of music choices, competing for the user's attention against other entertainment options on the ubiquitous smartphone, and being prominent on dozens of different digital platforms is not only critical for success, those are attributes that uniquely reside within today's record company," Mitch Glazier, RIAA's president, said regarding the results.
Comments
You can bet they get almost all of digital downloads.
Again Apple let everyone else take the arrow watch what they did right and wrong and came up with a better method.
I’ve likely got around $5,000 worth of CDs that I’ll never listen to again that have been packed up in boxes for several years. Their resale value is dropping precipitously.
I also look for music I want to buy on Bandcamp, where the artists get a fairer share of revenues, before buying it through other services (I only buy CD-quality or better files)).
To me, it’s worth paying more when it comes
down to that.
It seems like, the first time you eat a dish at a restaurant, it shouldn't generate much money for the restaurant at all, because you're just sampling or tasting it. Maybe it sucks and you hate it, and you're never going to eat it again. However, if you order it a subsequent time, that should generate the highest payout to the restaurant, because that indicates the patron actually liked the dish so much that they returned and ordered it again. But then, subsequent orders should decrease in payout along some curve back down to the tiny amount a food truck might get for every meal sold. That would probably give a boost to the restaurants making dishes that are actually enjoyed most, at the expense of not paying anything for the restaurant dishes that get a single order from lots of people, but where few people actually like them enough to order them again.
i could repeat the above with respect to movies - how many times have you gone to watch a movie and thought “...what a waste of my time and money”
Since the infrastructure is already there, it (now) doesn't cost Apple much of anything to keep offering paid downloads nearly indefinitely, so just as there's no reason not to offer a song that sells maybe five copies a year, there's no reason not to offer paid downloads to people who want them, even if that number is small.
It's the lossless physical media I worry about: that costs a great deal of money to produce and distribute, and while I get why people don't buy CDs as much (particularly at current retail prices), it would be a tragedy if consumers were ever unable to get a lossless, pristine, permanent copy of the music they invest in and/or collect.