The 2016 RIAA annual report had some encouraging news for the music industry and those of us who are vinyl aficionados.
Total revenues from recorded music in the US was $7.7 billion representing a year over year increase of 11.4%. This is good news as revenues had remained stagnant at $6.9 billion from 2014 to 2015. This also represents the largest increase since 1998, but the RIAA also reports that revenues are still only half of what they were in 1999. This increase was driven by substantial increases in recorded music delivered through streaming services like Apple Music, Spotify, Tidal and streaming radio like Sirius/XM and Internet radio as well as on-demand services like You Tube and Vevo. The RIAA also reported that for the first time these streaming services accounted for more than half of revenues (51.4%). Over the six year period from 2011 through 2016, the percentage of revenues from streaming services has increased from 9% to 51%.
It appears that digital downloads are the greatest victim of the streaming music increase. Downloads continued to decline from their peak of $2.8 billion in 2013 to $1.78 billion in 2016: a 36% drop over this period.
The share of revenues from physical products as a whole continued to decline experiencing a decrease of 16% to $1.7 billion. This was the result of CD sales dropping by 21%.
The good news for vinyl lovers, sales of vinyl records experienced a 4% increase to $430 million in sales representing 26% of the total of all physical recorded music sales. This is also the highest share that vinyl has seen since 1985. Who knows if this will continue, but for now, let’s enjoy knowing that we were right – vinyl does sound better.