Over the past few years, streaming services such as Spotify and Apple Music have revolutionized the way we listen to music. According to recent figures published by the Recording Industry Association of America (RIAA), streaming, both ad-supported and subscription-based, accounted for 75 percent of music industry revenues in the U.S. last year, up from less than 10 percent in 2010. At $4.7 billion, paid subscriptions accounted for the lion’s share of streaming revenue in 2018, which in total amounted to $7.4 billion. To put that in perspective, all physical music sales combined amounted to just $1.2 billion last year, with downloads adding another $1 billion to the music industry’s total haul of $9.8 billion.
Interestingly, the streaming revolution hasn’t been the first complete shift in music consumption over the past 30 years. As the following chart, based on historical RIAA figures, shows, vinyl records, cassettes, CDs and downloads have all been the predominant form of music consumption at some point in the past three decades, with the compact disc’s reign particularly long and lucrative for the music industry. Inflation adjusted music revenue peaked in 1999 at $21.5 billion at a time when the CD was also at its prime. That year CD album and singles sales amounted to $19.2 billion, more than twice the recording industry’s total revenue for 2018. After hitting a low point in 2014, the music industry started recovering: thanks to the steep increase in streaming subscriptions, 2018 marked the fourth consecutive year of growing music revenues.
The great Statista chart below allows us to visualize the dramatic shifts the music industry has gone through over the last few decades from Vinyl, to CDs, to the download iTunes era to the current trend of streaming music.
Streaming music continues to grow, with Spotify reporting their financials today showing that their premium subscribers grew 32% year-over-year.
Earlier this month Patently Apple posted a report titled "The Momentum is Shifting as Apple Music overtakes Spotify in terms of Paid U.S. Subscribers."