Streaming Accounted for 83% of $12 Billion Recorded Music Revenue in 2020
Despite the economic downturn brought on by the pandemic, the recorded music industry had a strong year in 2020, topping total revenue of $12 billion for the first time since 2005, according to the RIAA’s year-end revenue report released last Friday (February 26) and shared by Billboard.
Recorded music revenue has been on a steep upward incline since 2016 and posted its fifth consecutive year-over-year gain in 2020. Streaming has been the primary driver of that growth, with a 13.4% jump over 2019’s $8.88 billion to $10.08 billion in 2020. That number represents 82.9% of the overall revenue picture, compared to 79.8% in 2019.
The report contains a number of statistics, so here are a few key bullet points:
- Paid subscription on-demand streaming on platforms such as Spotify and Apple grew 25.0% to 75.5 million subscribers from the prior year’s total of 60.4 million subscribers.
- Paid subscription revenue grew 14.6% clip to $7 billion, up from 2019’s $6.12 billion.
- Limited-tier paid services, like Amazon Prime and Pandora Plus, grew 13.4% to $723.6 million from 2019’s $638.2 million.
- Ad-supported streaming, such as YouTube and Spotify’s free tier, totaled $1.18 billion, up 16.8% from the prior year’s $1.01 billion.
- SoundExchange revenue — from programmed streaming services like Pandora and iHeartRadio — grew 4.3% to $947.4 million from $908.2 million.
- Physical formats produced $1.139 billion in U.S. revenue, only down slightly from the prior year’s $1.14 billion, or a 0.5% decrease, thanks to increasing vinyl sales and rising vinyl and CD list prices.
- As a percentage of revenue, physical accounted for 9.4% in 2020, versus 10.3% in 2019.
- Vinyl posted the biggest increase last year across all formats, growing 29.2% to $619.6 million from the prior year’s total of $479.5 million.
- CD revenue fell 23.4% to $483.3 million from $630.7 million, dropping 33.5% in volume to 31.6 million copies from 47.5 million copies in 2019.
- Downloads also had a big decline, accounting for $674.4 million in 2020, an 18.0% decrease from the prior year’s total of $822.8 million. Downloads accounted for 5.55% of overall U.S. revenue versus 7.4% in 2019.
- Track downloads dclined 23.4% to $312.8 million from 2019’s $408.4 million, while album downloads fell 13.4% to $319.5 million from 2019’s $368.8 million. (Other downloads such as ringtones made up the rest of the category).
- Combining streaming and downloads into one digital number, we get a total of $10.75 billion, nearly a 10.8% increase from the prior year’s total of $9.7 billion. That’s 88.5% of overall revenue for 2020, versus 87.2% in 2019.
Also worth looking at: this interactive chart showing U.S. recorded music revenue by format year over year from the 1970s through 2020.
All of the above, it’s worth noting, was achieved without touring driving purchases of physical items in person and with many brick and mortar stores closed for months a a time, not to mention indirect increases in streaming spurred by touring activity. With that in mind, and the economy on the rebound meaning more money in folks’ pockets, 2021 seems poised for an even bigger year than 2020.
Read the rest of the report at Billboard.