US music revenues grew 9.2% in 2020 to $12.2 Bn making it the fifth consecutive year of growth for the industry despite the pandemic according to the RIAA. Paid subscription services continued to be the primary driver of revenue increases, and reached a record number of subscriptions. Streaming music’s share of total revenues grew to 83%. Covid-19 affected the industry significantly through tour cancellations, retail store closures, and other disruptions. Revenues from recorded music measured at wholesale value grew 8.9% to $8.0 Bn.
Streaming growth driven by subscriptions
Streaming music revenues grew 13.4% to $10.1 Bn in 2020. This category includes paid subscription services like Spotify, Apple Music, and Amazon Music Unlimited, ad-supported on-demand services such as Vevo, YouTube and the free version of Spotify, and digital and customized digital radio like Pandora, SiriusXM, and other Internet radio services. The streaming category for the first time includes music license revenues from Facebook and streaming fitness services (included for 2019 data as well). Streaming’s share of total revenues has continued to grow, reaching 83% in 2020.
Paid subscriptions to on-demand streaming services have contributed the majority of recorded music revenues each year since 2018. In 2020, full service paid subscriptions grew 14.6% to $7.0 Bn. Additionally, limited tier Total paid subscriptions accounted for 64% of total revenues at estimated retail value.
The number of paid subscriptions to on-demand streaming services continued to increase at double-digit rates in 2020. The average number of subscriptions grew by 15 million from 60.4 million in 2019 to 75.5 million in 2020, the biggest ever increase in a single year. These figures exclude limited-tier services, and count multi-user plans as a single subscription.
A broad post COVID-19 decline in advertising revenue growth across many forms of media impacted ad-supported on-demand revenues for music. Revenues from these services (such as YouTube, the free version of Spotify, and Facebook) grew 16.8% annually to $1.2 Bn in 2020, compared with an average of nearly 30% growth rate in the 3 years prior. The volume of music streams on these services continued to grow, with hundreds of billions of streams delivered to more than 100 million listeners in the United States, but only contributed 9.7% of revenues. Revenues from digital and customized radio services grew 3.9% to $1.2 Bn in 2020. Digital Downloads Revenues from digitally downloaded music were down 18% to $674 million in 2020. Permanent downloads of albums fell 13% by value to $320 million, and individual track sales were down 23% to $313 million in 2020. Downloads accounted for only 6% of total recorded music revenues in 2020.
Vinyl LPs outsold CDs
For the first time since 1986, revenues from vinyl records were larger than from CDs. Total revenues from physical products were virtually flat at $1.1 Bn (down 0.5%). Despite the challenges to retail sales from COVID-19 restrictions, vinyl grew 28.7% by value year-over-year to $626 million, though still only account for 5.2% of total revenues by value. Revenues from CDs declined 23% to $483 million, continuing a long-term decline.
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