14

RIAA: At $2B, streaming was music’s top revenue source in 2015

RIAA 2015 pie chart2015 was a banner year for streaming. The RIAA released its results for the past year and found that streaming was not just the biggest segment of digital revenue, but also the largest component of industry revenue, period.

Streaming secured 34.3% of all recorded music revenue in the U.S. last year, reaching $2.4 billion for the first time. In 2014, streaming held a 27% share, up from 21% in 2013.

The performance for 2015 demonstrated follow-through on the trend that has been developing since the 2014 RIAA results were published, and was again seen in the first-half figures for last year: streaming music continues its rise in both cultural and financial importance for the music industry.

RIAA 2015 streaming sourcesWithin that powerhouse performance for streaming music, all subsets saw growth. On-demand ad-supported revenue took the smallest slice, but still increased from $295 million to $385 million. SoundExchange distributions from streaming radio sources also rose from $773 million to $803 million.

Most impressively, revenue from paid subscriptions spiked up from $800 million in 2014 to more than $1.2 billion in 2015. The RIAA found that the average number of paid streaming subscriptions in the U.S. rose 40%, from 7.7 million in 2014 to 10.8 million in 2015.

The addition of Apple Music and Tidal’s subscription-focused streaming services to customers’ choice of streaming platform could be boosting those numbers. Apple most recently reported having 10 million subs, and even Spotify just announced hitting 30 million paying users.

RIAA 2015 paid subsTo give context for the streaming figures, overall revenue in 2015 rose 0.9% to $7 billion at estimated retail value (or 0.8% to $4.95 billion at wholesale value). All digital sources saw increased revenue, up 6% to $4.8 billion from $4.5 billion the previous year. Streaming was responsible for that growth, as digital downloads posted another year of declining revenue. In 2014, downloads generated nearly $2.58 billion, but the figure dropped to nearly $2.33 billion in 2015. Based on value, all digital sources were responsible for 70% of the overall market.

Finally, revenue from physical formats accounted for 28.8% of U.S. revenue last year. It clocked in at $2 billion, a 10% decline from 2014. The vinyl niche continued to perform well, up 32% in value to $416 million. That’s the best result for record sales in the RIAA results since 1988.

Be Sociable, Share!

Anna Washenko

14 Comments

    • If music isn’t easily accessible for free with ads or through a subscription, people will just steal it and then artists earn nothing.

    • Services like Spotify and Apple Music pay more than 70% of what they earn to the labels, and most of the rest covers expenses of running the apps. The problem is that the labels push artists into exploitative record deals where they only get a tiny share of the royalties, and the labels keep the rest.

      Also, the big money’s always been in touring and merchandise.

    • Not true. By law, streamers pay artists. In fact, Taylor Swift, in her 2014 dispute with Spotify, claimed she received $500,000 from the streaming company. So she got paid. However, it was far less than she felt she deserved.

  1. I, and people I know who are into listening to streaming have done so because:
    a) We’re not impressed with the music being released by the major labels.
    b) We’re into music genres (easy listening, jazz, blues, folk, classical, etc.) that commercial radio doesn’t play.

      • See here for the truth about streaming: techcrunch.com/2015/09/23/mo-users-mo-money/

      • Some indie artists may be upset about it, but, as this Newsweek article shows, some find it beneficial. newsweek.com/ten-indie-musicians-weigh-music-streaming-debate-355298

  2. Sally Ann and Billy Bob – I very much agree with the points you made.

    Idol Girl –
    I listen to 60s/70s/80s oldies my parents introduced me to – The Beatles, Elton John, The Eagles, James Taylor, etc. Of today’s music, most artists I enjoy are ones I’ve become a fan of from The Voice, American Idol, etc. Many of the ones I’m into from those shows are indie artists and they view streaming as beneficial. They use You Tube, Sound Cloud, and a variety of services to help promote their music.

  3. The streaming service I decided to subscribe to is Apple Music. They’ve recently let their service be available to Android phones and I can now listen to my iTunes purchases while I’m away from my home computer.

Leave a Reply

Your email address will not be published. Required fields are marked *