This week’s new data from the Recording Industry Association of America underscores that streaming continues to grow and dominate much of the music industry’s revenue. Interestingly, the data also highlights the record’s continued resurgence. In fact, the RIAA announced that in 2022, record sales will outstrip her CD sales for the first time in decades…
According to the RIAA, U.S. music revenue will grow 6% in 2022 to reach a record $15.9 billion. This is the sixth consecutive year of growth for the industry. In total, streaming accounts for 84% of that revenue, followed by physical sales at 11%, digital downloads at 3%, and sync royalties at 2%.
Here’s a breakdown of its streaming and physical earnings:
- Physical products: $1.7 billion (+4% YoY)
- CDs: $483 million (down 18% year-on-year)
- vinyl: $1.2 billion (up 17% year-on-year)
- Streaming: $13.3 billion (+7% YoY)
- Paid subscription service: $10.2 billion (up 8% year-on-year)
- Limited subscription (services limited by mobile access, catalog availability, etc.): $1.1 billion (up 18% year-over-year)
- Streaming with ads: $108 billion (+6% YoY)
According to the RIAA, the average annual number of streaming subscriptions increased 10% to 92 million, up from an average of 84 million in 2021. ‘ adds the RIAA.
For digital downloads (e.g. via iTunes):
Revenue from digitally downloaded music will continue to decline in 2022, declining 20% to $495 million. Digital album sales and individual track sales fell 20% to $242 million and $214 million, respectively. Downloads will account for just 3% of US recorded music revenue in 2022, down from a peak of 43% in 2012.
For physical format:
Revenue from physical music formats continues to grow after a spectacular resurgence in 2021. Total physical revenue was $1.7 billion, up 4% year-over-year. Revenue from vinyl records increased by 17% to bring him to $1.2 billion, marking the 16th consecutive year of growth and accounting for 71% of his physical format revenue. For the first time since 1987, vinyl albums sold more than his CDs (41 million versus 33 million). After a rebound in 2021 and Covid impacting 2020, revenue from CD fell 18% to $483 million in 2022.
9to5Mac’s take
I always find this data from the RIAA interesting. It’s no surprise that streaming continues to grow. One thing I’ll be watching for the rest of the year is the impact Apple Music’s recent price hike will have on the industry’s total streaming revenue.
Neither the RIAA nor Apple itself analyzes subscriber numbers for individual services. For Apple Music, the last official update he made was back in June 2019, when the service’s paid subscriber base reached 60 million.
Finally, we expect streaming services like Apple Music and Spotify to raise the royalty rates they pay artists this year. As touring costs continue to rise and strain even the world’s biggest bands, increased streaming royalties could go a long way in helping artists.
Of course, Apple is already far ahead of Spotify in paying artists at least some fair royalties.
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