Sales of recorded music grew 9.2% last year to $12.2 billion as subscriptions to streaming services reached new highs during the Covid-19 pandemic.
The past year marked the music industry’s fifth consecutive year of growth thanks to streaming, which accounted for 83% of total revenue, according to a report from record company trade group the Recording Industry Association of America. Revenue generated from music licenses to social media and fitness apps also picked up during the last year.
The pandemic lockdowns were momentous for at-home streaming entertainment services in 2020. With almost no live concerts, limited capacity at sporting events and closed movie theaters consumers tuned into music-streaming apps, and flocked to social apps like Instagram, and TikTok and at-home fitness apps like Peloton, which heavily rely on music to engage users. drive engagement.
Subscriptions to on-demand streaming services offered by Spotify Technology SA, SPOT 1.43% Apple Inc. and others grew to 75.5 million from 60.4 million in 2019, the biggest ever increase in a single year. The streaming category, which also includes ad-supported on-demand services, such as YouTube, Vevo and Spotify’s ad-supported tier, streaming radio services such as Pandora and SiriusXM, as well as music licenses for streaming fitness services like Peloton, generated $10.1 billion in 2020, up 13.4% from the previous year.
“These services are largely music-powered—whether it’s TikTok dances, skateboarding dreams, or Instagram people-watching, the ‘most followed’ lists for all these services and platforms are overwhelmingly made up of artists and music creators,” said RIAA Chief Executive Mitch Glazier.
RIAA’s data includes Peloton and Facebook, FB 1.15% which owns Instagram, but it doesn’t include TikTok.
The music industry’s fortunes started to turn around in 2016, when the growth from streaming services began to outweigh a 15-year decline in CD sales amid rampant online piracy. Revenue is still below, but closing in on, its 1999 peak of $14.6 billion.
Last year, sales of physical music products were flat at $1.1 billion. Revenue from sales of vinyl—up 29% to $626 million—surpassed revenue from CDs for the first time since 1986, though it still only accounted for 5.2% of overall revenue. Digital download sales fell 18% to $674 million, and accounted for just 6% of total revenue in 2019.
A decline in advertising revenue during the pandemic dragged on revenue from ad-supported on-demand streaming services such as Alphabet Inc.’s GOOG 0.27% YouTube and Spotify’s free service, which saw 17% year-over-year growth to $1.2 billion. The category saw nearly 30% growth in each of the prior three years.
Write to Anne Steele at [email protected]
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