Anyone who hasn’t caught on to the music streaming revolution is quickly getting left behind. With services like Spotify, Apple Music, and Amazon Prime Music hosting libraries full of almost any song you can think of, there isn’t really a reason to use anything else besides nostalgia.
New reports from the Recording Industry Association of America (RIAA) show that streaming accounted for 79 percent of American music revenue in 2019. That’s a jump of four percent from the year prior. Meanwhile, physical music sales continue to decline.
Accepting the Change
For several years many consumers resisted the push towards streaming, opting instead to download their music from a service like iTunes or purchase a physical CD. However, times are quickly changing. The new RIAA data certainly suggests that users’ preferences are changing along with it.
Last year was a huge year for the music streaming industry, raking in $8.8 billion in the American market alone. Driving the increase is a growing number of subscribers—specifically those of the paid variety.
Music streaming services had just over 60 million paying subscribers in 2019, up from 47 million the year before. More importantly, those users account for 61 percent of the entire music industry’s revenue ($6.8 billion).
That’s not only an impressive statistic but a sign of what the music world looks like today. Rather than dropping $15 on a new album when it releases, consumers can pay something like $5 a month to listen to all the music they want. While that subscription fee is split up among all the artists they enjoy, it is a far more consumer-friendly way of getting music.
Unsurprisingly, good news for streaming is bad news for other formats. In 2019 physical music sales were down by 2 percent while downloads slipped by 3 percent. One bright spot is vinyl, which is making a slight comeback. Record sales increased by 19 percent in 2019 (appropriate) but still account for just 4.5 percent of the industry’s total revenue.
Adjusting to the New Normal
Getting consumers and artists to buy in on streaming hasn’t been easy. Nor has it been a short road. Yet, slowly, it seems that the industry is finally accepting the world’s new favorite way of listening to music.
That acceptance may have sparked the 13 percent growth that the American music industry as a whole saw in 2019. It is now worth over $11 billion.
Part of this is likely due to the fact that more people are coming around to the idea of paying for a streaming subscription. If they can listen to any artist, at any time, on any device they own for just a few bucks there aren’t many reasons to say no.
Still, the RIAA has complaints that streaming services aren’t paying artists fairly. While it’s true that music isn’t as lucrative as it once was, everyone must adjust to this new normal. Consumers get exposed to new artists and can constantly connect with their favorite ones. Meanwhile, artists reach more listeners and are able to make up revenue through tours and merch sales from their new fans.
At the end of the day, music streaming is a good thing. The data from 2019 shows that it is helping the entire music industry and should continue to do so in the years to come.