By, Wendy Day
The US recorded music market grew almost 1% last year (2015).
But the real news is that paid-subscription streaming income increased 52.3% to $1.22 billion. There were almost 11 million paid subscribers for streaming services in the US. To put that into perspective in the realm of all entertainment, estimates put Netflix’s US paid subscriber base at around 40 million subscribers for their service which offers television shows and film (75 million worldwide).
In addition to streaming services earning income from subscribers, they also earn income from ad revenue which was just over $385 million. This is a 30.6% increase over 2014’s revenues for the free tiers at streaming services like SoundCloud, YouTube and Spotify. Of streamed music in 2015, paid-for services accounted for 51% of the overall income, ad-funded contributed 16%, and SoundExchange accounted for 33%.
Thanks to streaming services like Spotify, and with the introduction of TIDAL and Apple Music, the overall retail income increased 0.9% in 2015 to $7.02 billion in the US, according to the RIAA. The money paid to artists and labels also increased 0.8% to almost $5 billion–the 4th consecutive year that wholesale income has grown.
Income from digital download sales declined 10% to $2.3 billion while the total value of digitally distributed formats were up 6%, which is a $3 million increase from 2014 to $4.8 billion. Revenue from non-interactive streaming services such as Pandora, paid through to SoundExchange, were $802.6 million, an increase of 3.8% from 2014. Including SoundExchange, total streaming income hit $2.41 billion in 2015.
Giving proof to the fact that streaming services are increasingly the way fans prefer to get their music, digital album download sales decreased by 5.2% in 2015 to $1.01 billion, while CD album sales declined 17% to $1.52 billion. Ownership of music in 2015 was a total of $2.53 billion. Single downloads fell to $1.23 billion, which is a 12.8% decline from 2014. This is the first time that total downloads of music ($2.32 billion) sunk below total streaming revenues.
In terms of revenue producing music (meaning: not bootlegged or illegally downloaded) in the US, streaming accounts for 34.3% of the market, digital downloads are 34% of the income, and physical sales are 28.85%. The remaining 2.9% of US revenues are from sync fees. (In 2014, those totals were 27% streaming, 37% digital downloads, 32% physical sales, and 3% synchronization).
Apparently vinyl is still hip, because sales climbed 32.2% in 2015 for a total of $416.2 million. Does anyone else find it odd that the income from vinyl sales ($416.2 million) out performed the total ad revenue from streaming services (385.1 million)?
The RIAA finally released their stats for the 2015 US music industry. Why it always takes 3 months to compile this information in music is an embarrassment. The point of big data is that it’s delivered in real time to be effective. We apparently haven’t learned that in the corporate music arena yet. In my opinion, these 2015 stats aren’t good or bad–they just are what they are. It’s up to us to make money with music, and my clients are making money. Hopefully you are too.