Technology

Streaming accounted for 80% of the American music industry revenue in 2019

This means that, regardless of the streaming war, these platforms are contributing to the growth of revenue in the music market. And Spotify appears to be the leader of this process by far

Spotify starting up on an iPhone 8 connected to a new Skoda car.
Photo: Shutterstock
  • As “streaming”, the report includes a wide variety of formats, from premium subscription services, to ad-supported on-demand services, and streaming radio services.
  • In the U.S., Spotify has surpassed Pandora in number of subscribers in 2019.

The Recording Industry Association of America (RIAA) has published its 2019’s results. It was the fourth consecutive year of double digit growth driven by paid subscriptions services–the U.S. has over 60.4 million paid subscriptions only in the music market, a 29% growth compared to 2018, according to RIAA. 

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Last year, the recorded music market reached $11.1 billion at estimated retail value, 13% above the $9.8 billion amount from the prior year. The subscription services has accounted for 79.5% ($8.8 billion) of this total. At the same time, revenues from recorded music measured at wholesale value grew 11% to $7.3 billion. 

Source: RIAA.

As “streaming”, the report includes a wide variety of formats, including premium subscription services (as Amazon Music, Apple Music and Spotify Premium), ad-supported on-demand services (such as YouTube, Vevo, and ad-supported Spotify), and streaming radio services (like Pandora, SiriusXM, and other Internet radio services).

Source: RIAA.

The streaming market alone in 2019 was larger than the entire U.S. recorded music market just 2 years ago in 2017

RIAA, YEAR-END 2019
RIAA MUSIC REVENUES REPORT.

Also according to the report, paid subscriptions to on-demand streaming services contributed by far the largest share of revenues as well as the biggest portion of revenue growth for the year, with a total revenue of $6.8 billion, 25% more than the year before. 

This means that, regardless of the war between streaming services, these platforms are contributing to the growth of revenue in the music market as a whole and, in general, managing to transform a great part of their free users into effective subscribers.

Another important fact is that streaming services are growing while the download of music–which, in practice, was the music industry’s first digital reaction to stop piracy in the first decade of the 2000s–is falling.

Source: RIAA.
Source: RIAA.

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Spotify becomes the number one in the U.S.

Speaking of the streaming war, Spotify has surpassed Pandora in the last quarter of 2019. According to Forbes, since its launch in 2020, Pandora was the most popular music streaming service across the U.S. Last year, however, everything changed. 

While Pandora lost subscribers (8.1%) and ended 2019 with 63 million listeners, Spotify gained new users, inside and outside the United States, and reached 124 million global subscribers.

In a recent report, the consultancy eMarketer said that it expects Spotify to continue growing its listeners. In fact, according to Forbes, the number of Spotify listeners has increased at a rate much quicker than eMarketer’s previous predictions. As Amazon Music and Apple Music are also growing, it’s difficult to forecast who is going to win this war in the near future.