Music industry’s transition from physical to virtual sales is almost a ‘fait accompli’.
Total revenues from recorded music in the US grew 10pc to $4.6bn in the first half of 2018, according to the Recording Industry Association of America (RIAA).
Crucially, streaming now accounts for three-quarters of industry revenues, reflecting the industry’s rapid transition from unit-based physical and digital sales towards streaming music sources.
‘The growth achieved so far is in spite of our music licensing system, not because of it’
– MITCH GLAZIER
According to the RIAA revenues from streaming, music grew 28pc year over year to $3.4bn for the first half of 2018.
This broad category includes revenues from subscription services such as paid versions of Spotify, Apple Music, Amazon, Tidal and others; digital and customised radio services such as Pandora, SiriusXM and other internet radio; and ad-supported on-demand streaming services such as YouTube, Vevo and Spotify (ads version).
“The overwhelming majority of the industry’s revenue growth during the period came from streaming music,” the RIAA said. Of the remaining 25pc of total revenue, digital downloads accounted for 12pc, physical sales of CDs and vinyl accounted for 10pc of revenue, and 3pc came from synchronisation royalties.
Licensing laws are out of tune
However, despite the success of streaming, RIAA CEO Mitch Glazier took a pop at outdated US licensing laws, which he said are preventing artists from getting their fair share of the spoils.
“We also recognise that the growth achieved so far is in spite of our music licensing system, not because of it,” he said. “That’s not how it should work.
“Fortunately, a bipartisan bill, the Music Modernization Act, is edging closer to final congressional enactment. The elements included in that bill close some of the most glaring loopholes in our licensing laws, but it is not a comprehensive reform that ensures all artists earn fair market rates on all platforms. We still have much work to do.”