The recorded music business in the United States continues to trend up, reporting double-digit gains last year, with streaming the saviour once again.
That’s the good news. The bad? The rate of growth in streaming appears to be flattening, an issue that’s glaring in many mature digital music markets. Put it in the “watch with interest” basket. And if you’re in the game of CDs and downloads, you’re in trouble.
Overall, the U.S. record market appears healthy. The world’s biggest record market generated US$11.1 billion in 2019, a 13% gain on the previous-year figure, the RIAA announced Tuesday.
It’s the fourth successive year of growth. After a decade-plus of savage decline and the early signs of catastrophe, the No. 1 record market is trending up.
The heroes, again, are Spotify, Apple Music, YouTube Music and the range of streaming products which Americans are happily paying for like a utility.
In recent years, the streaming space has been increasing like its on steroids, from 68.5% in 2016 to 43% in 2017 and to 30.1% in 2018. That rampage is no more, with streaming posting a 19.9% gain in 2019.
Those numbers tell only part of the picture. In real terms, the sums generated from streaming in recent years have been roughly equal at about US$1.6 billion or US$1.7 billion each year. The real growth from streaming in 2019 was measured at $US1.43 billion, a sum that’s still three times greater than Australia’s entire recorded music market. It’s down, but it’s not ugly. Far from it.
Revenue from paid subscriptions was up an encouraging 25% to US$6.8 billion and the number of paid subscriptions spiked by 29% to 60.4 million in 2019, a five-fold increase in just four years.
Those sorts of gains can’t last forever. British music and media analyst Mark Mulligan, managing director at MIDiA Research, has warned that streaming would inevitably plateau.
In a presentation last year to the Music Tectonics Conference in L.A., Mulligan stated, “A recession is coming…Think about what happens in a recession. Discretionary spending. Subscriptions are likely to be hit really hard. Live will be probably be hit hard too. Start planning.”
In a surprise to no one who watches this evolving business, the RIAA revealed the sale of digital downloads (tracks and albums) are diminishing – permanent downloads dropped below the US$1 billion mark (to US$856 million) for the first time since 2006 – while vinyl continues to surge.
Fun fact: vinyl revenue beat the numbers from album downloads and digital track downloads for the first time since 2004, when the trade body started tracking download data.
ARIA has yet to post full-year figures for 2019. Its last market report, for 2018, showed revenue raced past $526 million during the period, up 12.26%, with streaming products providing all the juice.