Another confirmation that streaming is hitting big in the US. According to the last report issued by the Recording Industry Association of America (RIAA), streaming already accounts for 32% of the US music industry’s revenue at just $1 billion. This is a staggering transformation as streaming services are finally eclipsing the CD sales.
However, permanent digital downloads, still accounted for the largest part (40%), as they include album sales from iTunes, Amazon, and other music stores. As streaming rises, download sales are surely decreasing and compared to last year, they are down by 4%.
Nearly half of every streaming dollar that went in the U.S. thus far ($478 million) actually arrives from the 8.1 million paid subscriptions to services such as Spotify Premium. The royalties like Pandora and SiriusXM made up the bulk ($387 million) of the rest of this revenue. The “freemium” streaming services, which rely only on ads to bring in the money brought in just $163 million, or 16% of total streaming revenues. We shouldn’t forget that Apple’s new subscription music service was launched on the last day of the period measured by the RIAA, so it wasn’t a part of the conversation. It’s too soon to say whether or not Apple’s service is really a big deal, but we’ll wait and see that in the second half of this year.
Regarding the physical formats like CDs and records, we can say that they are no longer the leaders in this business, but they still accounted for 24% (or $691 million) of revenues according to the report. CDs brought in about two-thirds of that cash, while the vinyl revival brought in another $221 million, or 30 percent of that cash. And the Vinyl sales continue to go through the roof, jumping an impressive 52.1% compared to the last year alone.
However, it safe to say, that even though streaming music didn’t edged out CD sales last year, this year it’s not even going to be a close fight.