The U.S. music industry is the No.1 recorded music market in the world. Music consumption is directly proportional to accessibility, thereby making it dependent on how music is consumed.
According to a half-yearly report released by the Recording Industry Association of America (RIAA), revenues from streaming grew 26% to $4.3 billion during the first half of 2019. The report project that the U.S. recorded music market generated $ 5.39 billion across all formats during this period.
For the first time, this revenue was driven by an exceeding number of 60 million paid subscribers. Therefore, the total revenue grew by 18% to $5.4 billion at retail, and a 16% increase in wholesale, amounting to $3.5 billion for this period.
Paid subscriptions on OTTs such as Spotify, TIDAL, Apple Music, Amazon, digital and customised radio services like SoundExchange (like Pandora, SiriusXM), and ad-supported on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify) have contributed largely to be the biggest source of revenue for recorded music. From the industry’s overall revenues, 62% is sourced from paid subscriptions alone, meanwhile, this sector made up to 77% of streaming music revenue in the H1 of 2019.
The total number of U.S. based paid subscriptions to premium on-demand streaming services grew 30% to 61.1 billion, on average, in the half-year to the end of June.
Streaming in the U.S.
The U.S. streaming offers “limited tier” streaming subscriptions, i.e, these subscriptions do not offer premium access in apps like Pandora and Amazon Prime. This segment generated $481.6 million in this period which was a year-over-year increase of 39.4%.
Also, the revenue combined with “lean back” radio royalties and ad-supported on-demand offerings from apps like Spotify, added to the total U.S. streaming revenue to $4.21 billion for this same period. This was an up by 26.4% or by $899, year-over-year.
The revenues during this period were up by 18% or $822 million as compared to H1/2018 which amounted to $4.56 billion. H1/ 2018 as compared to H1/2017 was up by 9% ($383 million) from $4.18 million.
What’s the catch?
Reiterating the statistics in the RIAA report project that the U.S. recorded music market generated $ 5.39 billion across all formats during the first half of 2019.
However, Neilsen music’s mid-year report 2019, stated that audio streaming fell by 5% during the same period. Also, the U.S. market saw 333.5 billion total on-demand audio streams.
These streams were calculated on services like Spotify and Apple Music from Jan 4 to June 20, 2019.
While Nielsen reports suggest that 261 billion streams were counted in the first half of 2018, an increase of 76.6 billion from the first half of 2017 (184.4 billion), H1/2019 paints a different picture.
The 261 billion audio streams from H1/ 2018 was an increase of 76.6 billion, or 41.5%, on H1 2017’s equivalent haul (184.4bn).
The total streams in H1/2019 as compared to H1/2018 was 4 billion streams lesser than the equivalent growth in H1/2018 as compared to H1/2017.
All in all, the on-demand streams on audio and video were up in 31.6% year-over-year in H1/2019 accounting to 507.7 billion. In 2018 the total streams grew by 35.4%, year-over-year to 385.7 billion, as per the Nielsen Report.
That said, with the recorded music revenue amounting to over $5 billion, Mitch Glazier, Chairman, and CEO, RIAA expressed his joy over a blog post,
“It’s great news for the music business and for the U.S. economy overall. Music contributes $143 billion to the nation’s GDP every year, supporting more than 157,000 music-related businesses and nearly 2 million jobs. A healthy music economy fuels a healthy American economy.”
While the music business thrives on new talent and developing the existing ones, the major labels in the U.S. 20% of major labels have a roster of fresh artists every year. Also, in the age of streaming,
the net revenues from physical products also grew by 5% to $485 million in 1H 2019 in the U.S.
The country is still fighting piracy and stream-ripping operations, music takes the lead of being the most consumed thing on the internet today. Also, making musicians the most followed users worldwide. The popularity of musicians, leading to immense fandom has immeasurable strength in making the music industry in the U.S. strong, followed by Japan.