U.S RECORDED MUSIC IS GOING GANGBUSTERS
Another day and another dollar for the Recording Industry Association Of America (RIAA).
Make that US$8.7 billion American dollars. That’s how much in value the recorded music industry grew in the US in 2017.
The pile of money earned by the sales of recorded music last year is equivalent to a 16.5 percent growth spurt. More than adequate to make any business buoyant and healthy at least for the foreseeable future.
ARIA’s statistics are important because the US market typically acts as a barometer for recorded music markets in most advanced economies.
2017’s data shows growth continuing to rise from the previous year. And like last year increased sales were driven by a rise in paid music subscriptions to services such as Spotify, Amazon, Tidal, Pandora and of course, AppleMusic.
These music services and others show an increase of 50 percent in the recorded music business bottom line.
The latest figures are also notable because this is the first time that US music revenue has grown for two years in a row since 1999.
But, read into the figures, and a sobering fact emerges. It has taken the industry ten years to equal the US$8.7 billion revenue earned in 2008.
2008 was a bumper year. But the music industries decline since then follows the same trajectory as the beginning of the so-called Global Financial Crisis (GFC) that is said to have started wreaking its worldwide havoc in 2008.
So-called, because some experts argue the GFC was/is the result of an abundance of surplus commodity production. Capital in the form of money is regarded as just another commodity.
By 2008 the surplus amount of recorded music collided with tightening credit, job losses and a plunge in consumer confidence.
But, reality continues to rain on ARIA’s latest parade of revenue figures.
Last year’s bumper revenue is still 40 percent below previous peak levels largely due to a steady decline in physical and digital unit sales offsetting solid growth in streamed music.
In 2017 streaming accounted for nearly two-thirds of the total U.S. music industry’s earnings.
ARIA includes premium subscription services, streaming radio services and ad-supported on-demand streaming services such as YouTube, Vevo, and ad-supported Spotify under its “Streaming” category.
Overall streaming platform revenues grew by 43 percent to US$5.7 billion and accounted for 65 percent of total revenues in 2017.
Segmenting overall revenue shows digital downloads contributed 15 percent of revenue, physical media including CDs, DVDs and Blu-ray were at 17 percent while streaming gave revenue a 65 percent boost.
Streaming's US$5.7 billion earning eclipses earnings of US$1.8 billion in 2014.
The industry’s hero last year was paid subscriptions whose year on year revenue growth of 63 percent ensured total subscription revenues of US$4 billion, America’s biggest recording format.
On-demand streaming services supported by advertising were up to the tune of 35 percent or $659 million for the same period.
Tracking services estimate consumers streamed more than 300 billion songs, an understated figure due to unreported streams on YouTube, the most popular music service.
Digital and customised radio services tallied up to US$914 million and were down 5 percent on 2016’s figures.
Digital downloads also shed growth and fell 25 percent to US$1.3 billion. Notably for the first time since 2011 revenue from physical products were greater than that earned from digital downloads.
Single track downloads were down 25 percent in 2017 while digital album revenue fell by 24 percent compared to 2016.
Physical products fell by just 4 percent to US1.5 billion in 2017, a gentler rate of decline compared to recent years.
Turntable fans can rejoice. Vinyl continues to shine amongst physical formats with revenues up by 10 percent to US$395 million.
CDs did not fare as well, plunging 6 percent and US$1.1 billion in the same period.
But revenues from sales of physical products accounted for 17 percent of the recorded music industry’s total in 2017.
Get the full report here.
One of the veterans of the Australian HiFi industry, Peter was formerly the Audio-Video Editor of the Herald Sun for over two decades. One of the most-respected audio journalists in Australia, Peter brings his unparalleled experience and a unique story-telling ability to StereoNET.