When the likes of digital music stores first arrived, there were massive concerns that the loss of physical album sales would kill the industry and once streaming services started gaining traction, that fear only escalated.
While some of those predictions might have materialised for the likes of traditional record stores and how album sales are calculated, it appears that the entire industry is on the up and up as the annual year-end report from the RIAA (Recording Industry Association of America) has revealed that the overall revenue in the industry rose last year to $11.1 billion, up from $9.8 billion in 2018 and $8.8 billion in 2017.
That is pretty significant growth and it’s mostly due to the rise of subscriptions to streaming services like Spotify, Deezer, Apple Music and Amazon Music which now accounts for 79% of that total revenue and subscriptions in the US rising to over 60 million people.
Interestingly, while physical album sales were predictably down overall, vinyl is back on the rise and grew by 19%, even though its overall market share is a minor 4.5% of the overall market share.
So while music streaming has definitely had an impact on the way recording companies have had to make their money, it appears that the industry as a whole has grown, and more people continue to listen to and spend money on music. Having access to more music for less has only increased that desire.
What these metrics don’t indicate is exactly how much of this money is going back to the record labels and the artists, although musicians tend to make the majority of their money from performing live rather than record sales which go to the record labels that fund them. Hopefully the labels are able to get a decent share of this income too and we can continue to see the likes of streaming services only continue to grow the music industry.
Last Updated: February 27, 2020