US recorded music revenues hit $9.8 Bn in 2018 up 12% on the previous year according to the RIAA, the US recorded music industry association. For the third year in a row growth was driven primarily by increased revenues from paid subscription services from Spotify, Apple Music, Tidal, Amazon and others, achieving more than 50 million subscriptions in the US. Revenue growth from streaming formats continued to be offset by decreases from both digital downloads and physical formats.
Streaming now makes up 75% of total US revenues with vinyl continuing its resurgence, up 8% to $419 million, the highest level since 1988. Revenues from streaming music platforms grew 30% year on year to reach $7.4 Bn contributing 75% of total revenues for 2018, and accounting for virtually all the revenue growth for the year.
Paid subscription services grew 42% compared with the prior year, exceeding 50 million for the first time ever. On average, more than one million new subscriptions were added every month. Revenues from advertising supported services such as YouTube, Vevo, and the free version of Spotify, grew 15% annually to $760 million, a slower rate than other streaming formats. Ad supported services streamed more than 400 Bn songs to listeners in the US, more than one-third of an estimated total of 1.2 trillion streams, yet contributed only 8% to total revenues for the year.
Digital downloads were down for the sixth consecutive year accounting for only 11% of sales in 2018 compared to 42% in 2013. CD sales continued their decline down 34% on the year compared to an 8% increase for vinyl.
Mitch Glazier, RIAA Chairman & CEO, wrote in a blog posting that US recorded revenues had not recovered to 2007 levels. “As noteworthy as it is for the business to approach $10 billion in revenues again, that only returns U.S. music to its 2007 levels. Stream-ripping, and a lack of accountability for many Big Tech companies that drive down the value of music, remain serious threats as the industry strives for additional growth.”
Glazier also was enthusiastic about the increasing number of artists that are being signed to major record labels, saying that, “According to an illuminating recent report (“Same Heart. New Beat”) by NYU Steinhardt Music Business Program Director Larry Miller, more than 650 new artists were signed to major labels in 2017, a significant increase over prior years. At the same time, labels’ evolution continues, with teams working 24/7 to support their artist partners with coordinated global campaigns that turn local breakouts into international superstars.”
To read Mitch Glazier’s full commentary on the industry’s performance in 2018 go here. To download the RIAA 2018 Year-end Music Industry Revenue Report go here.
