Streaming now accounts for 79% of US music industry revenue, RIAA says

AppleInsider

Streaming services like Apple Music, Spotify and Pandora generated $8.8 billion to account for 79% of all U.S. music industry revenue in 2019, according to new data from the Recording Industry Association of America.

Source: RIAA

In its full-year 2019 revenue report for U.S. recorded music, the RIAA says streaming revenues were up 20% from 2018, a marked rise largely attributed to growth in paid streaming services. The overall industry grew 13% to hit $11.1 billion in retail value.

According to the report, revenues derived from subscriptions hit $6.8 billion last year, up 25% year-over-year. That sum equates to 61% of total recorded music revenues in the U.S., the group notes. Impressively, subscriptions accounted for 93% of streaming sector growth, with for-pay services adding an average of one million new accounts per month to top 60 million subscriptions in 2019.

RIAA Chairman and CEO Mitch Glazier in a blog post on Tuesday said, "Music isn't transitioning to digital' - it is leading a digital-first business."

"Today's report reflects the prospect of a future in which creators have a path forward," Glazier said. "But it also reveals how much farther we must go to assure a healthy music community in which all music is valued and creators are fairly compensated. We still have not realized the full value of music on all digital services."

Over the past ten years, streaming revenue has grown from a minuscule 5% slice of the overall pie to overtake both traditional physical media and digital downloads initially popularized by iTunes. In 2009, physical media accounted for 59% of all industry revenue followed by digital's 34% share, figures that slid to a respective 10% and 8% of the whole in 2019.

Downloads have dropped precipitously as streaming usurps per-track and per-album purchases. According to the RIAA, digital fell 18% between 2018 and 2019, with last year being the first since 2006 in which downloads brought in less than a billion dollars, reports Variety. For reference, streaming revenues first surpassed sales of digital downloads in 2015.

After revolutionizing the music distribution industry with iTunes and iPod, Apple debuted its own streaming service, Apple Music, in 2015. The product challenges market incumbent Spotify, which boasted 124 million paid subscribers as of February. Apple last released public Apple Music statistics in June 2019, when the service accumulated 60 million subscribers.

bobolicious

...does the 'music industry' truly include musicians...? https://musically.com/2019/11/22/artist-zoe-keating-reveals-latest-spotify-per-stream-payouts/ I buy direct in an attempt to support creators, including CDs at concerts as I can. Are there also privacy implications of both download and streaming services...?

Beats

Apple needs to take this space more seriously. Is this the first time Apple was 2nd place since the original iPod?

chasm

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

Beats

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

I saw this coming but seriously how far ahead was iTunes compared to...... whoever was 2nd place?

CloudTalkin

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

Nothing you wrote makes any sense.  Apple subs aren't all full cost.  Verizon does free Apple music subs.  Both AM and Spotify have run -and are still running- multiple promotions.  Some of the subs for both companies are subsidized.  Apple and Spotify charge the same amount for their services.   Math does not support your assertions of Apple being in first place from a revenue standpoint.  It also doesn't support your confidence of profitability related to Apple Music.  That leap in logic you made -Services is growing and profitable as an entire division, therefore Apple Music is profitable as a part of that division- is not logical at all.  I doubt you could come up with any viable math that remotely supports your opinions.

It's more likely that Apple, Amazon, and Google are all floating their music streaming services. 

rain22

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

 

2014 called - they want you to move out.

jcs2305

Beats said:

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

I saw this coming but seriously how far ahead was iTunes compared to...... whoever was 2nd place?

At the time Itunes launched in 2001 was there another application and store that they were competing against? I don't even remember anymore?  Until iTunes I never purchased any music outside of my local brick and mortar shop.

sirlance99

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

So like my Apple Music which is “paid” for by another company because it’s a part of the promotion. It’s the same for both. 

zoetmb

The RIAA has always had a problem with computation unless they're calculating percentages first and then rounding off units and revenue for the report.   Streaming actually works out to 81.5% revenue share (up from 77.1% in 2018 and 66.1% in 2017) and digital downloads take another 7.9% for a total of 89.4%.   Physical media is now down to 10.6% (it was 32.4% five years ago).   Note that they also revise figures a year after the fact. Several of the 2018 numbers dropped in this report compared to what they originally reported for 2018 a year ago.  

Even though paid streaming subscriptions increased over 2018 by 28.8% in number of subscribers and 27.5% in revenue, the number of subscribers actually dropped from what the RIAA reported for the first half of the year.   For the first half of the year, they reported 61.1 million subscribers, but for the full year, they're reporting only 60.4 million.   That's the first loss in streaming subscribers since they started reporting. 

In recent months, there was a lot of hype about LP's outselling CD's based on a bad headline in Rolling Stone magazine.  LP's were never going to outsell CD units in this timeframe, but what the article actually alleged was that revenue from LP's was going to exceed CD's, but even that didn't happen.  In 2019, 46.5 million CD's were sold representing $614.5 million of value at list prices and 19.1 million LP's were sold representing $497.6 million.   However that 19.1 million LP's did represent a 14.4% unit increase over 2018 and is the largest number sold since 1989, when 34.6 million LP's were sold.   (CD's peaked in 2000 at 942.5 million units, vinyl LP's peaked in 1977 at 344 million.)  So LP sales would have to increase by about 23% or CD sales would have to fall by about 19% (or any combination) for LP revenue to equal CD revenue.   

davgreg

I purchase mine but do pay for iTunes Match which gives me my whole library streaming.

Apple seems to have largely ceded the high quality digital track market to players like HD Tracks where you can buy digital tracks in your choice of formats. I tend to buy from them when they have the tracks and still buy CDs when they do not.

Pat Metheny’s From This Place just came out and I pre-ordered the CD. That is not the kind of thing you would want to listen to in a low quality streaming format.

davgreg

chasm said:

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

Apple Music has been a bonus with both Verizon and Volkswagen.

entropys

davgreg said:

chasm said:

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

Apple Music has been a bonus with both Verizon and Volkswagen.

Pretty sure the intertube companies pay Apple for the subs. A bulk discount perhaps, sort of a super family plan.

Beats

jcs2305 said:

Beats said:

chasm said:

Apple is probably not in second place when you look at revenue from streaming -- they're probably in first place. Spotify has more "paid" users, but a huge number of them are subsidized users who aren't actually paying directly -- its part of their cell phone bill. To date, Spotify has been unable to turn a profit with all those users -- suggesting the income-per-user average is low (and that's with Spotify still in court for not paying all royalties!).

Apple's subscriptions are full cost (across the single/family/student tiers), which allows them to, you know, pay artists. In fact, AM pays the highest rate of royalties among the various streamers. Given the growth and profitability of Services at Apple, I feel confident saying that at present there is only one or maybe twos streaming music service making a profit, and I doubt Amazon Music or YouTube Music is in the black yet.

I saw this coming but seriously how far ahead was iTunes compared to...... whoever was 2nd place?

At the time Itunes launched in 2001 was there another application and store that they were competing against? I don't even remember anymore?  Until iTunes I never purchased any music outside of my local brick and mortar shop.

Same with iPhone/iPad/Apple TV there were no other options and now knockoffs are outselling them.

At the time there was something much larger and more popular than iTunes and everything was FREE.