Friday March 01, 2019

Revenue from Music Streaming Services Grew 30% in 2018

According to the RIAA 2018 Year-End Music Industry Revenue Report, revenue from streaming music platforms grew 30% year-over-year (YoY) in 2018. Revenue from streaming music platforms was $7.4 billion and contributed to 75% of the total revenue from 2018. Nearly all U.S. music industry revenue growth in 2018 came from streaming music platforms! Subscriptions to music streaming services accounted for more than half of total revenues for the year as subscription revenue increased 32% to $5.4 billion. The industry averaged over one million new subscriptions added on a monthly basis. Over 50 million people subscribe to a paid music service as the amount of subscribers grew 42% in 2018. Revenue from digital radio stations grew 32% YoY to $1.2 billion and exceeded the $1 billion mark for the first time.

Permanent digital-download sales fell 25% YoY as the category experienced its sixth consecutive year of decline. Physical products declined 23% YoY with CD sales declining 34% to $698 million. This is the first time since 1986 that revenue from CD sales has been less than $1 billion. On a positive note, the revenue from vinyl sales was up 8%. This is the highest level for the category since 1988. Vinyl contributed to 33% of revenues from the physical category.

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Revenues from on-demand streaming services supported by advertising (including YouTube, Vevo, and the free version of Spotify) grew 15% annually to $760 million, a slower rate than other streaming formats. These types of services streamed more than 400 billion songs to listeners in the Unites States, more than one-third of an estimated total of 1.2 trillion streams, yet contributed only 8% to total revenues for the year.