No matter how you listen to your music these days, be it through Spotify, Apple Music, Amazon, Pandora, etc., it’s most likely being streamed to you on your smartphone, computer, smart speaker, etc. Streaming has quickly taken over as our main mode of listening. In 2018 the streaming music business continued to grow, to the point that just within the U.S., streaming music was responsible for seventy-five percent of industry revenue.
Music Industry Report
The other methods you have used to listen to music prior to the past ten years depends on your age, whether you listened to vinyl, cassette tapes, CDs, MP3s, or all of the above. And while you may still be dabbling in those same other methods, most likely you stream most of your music today.
Music is a business – it’s an industry. Before streaming music we paid for our music. Sure, we could listen to it on the radio, but we also bought record albums and 45s, cassette tapes, and CDs. Growing up in the 70s, I spent my allowance on 45s. I skipped the age of cassettes and went to spending a lot of money on CDs. Once we entered the digital world, I bought all my music from iTunes. Throughout it all, I listened to the radio, but now? I stream my music, every single song.
And so are many other people. The revenue from streaming platforms is 2018, be it Spotify, Apple Music, or Sirius, grew 30 percent over 2017, hitting $7.4 billion in the U.S. Yet the total music industry revenue for the past year was just $9.8 billion. That means all music platforms other than streaming only accounted for $2.4 billion.
Not only is streaming music growing as an industry, it’s growing the music industry as a whole. That $9.8 billion is up from $8.8 billion in 2017 and $7.6 billion in 2016.
Physical sales of music accounted for the second largest revenue in the industry, being responsible for 12%, while digital downloads accounted for 11%. Synching accounted for the remaining 3% And that 11% in digital downloads fell for the sixth consecutive year.
Interestingly, one other growth in the industry is in vinyl records. While physical sales were down overall as well, vinyl record sales were up 8%. It seems there are some music purists out there who are insisting on listening to their vinyl.
Of that streaming music, paid subscriptions, such as Spotify and Apple Music, make up the largest chunk of that revenue, with digital and customized radio services making up the next chunk, and ad-supported and on-demand services making up the remainder.
Spotify and Apple Music
For those of you who are wondering, it’s unknown what the breakdown in revenue is between paid subscription services. However, Spotify is still edging out Apple Music in number of subscribers, 87 million to 50 million.
However, put that together and realize that between the two of these behemoths, they are responsible for 137 million paying subscribers. It’s easy to see where the that streaming revenue is coming from.
Did you contribute to that $7.4 billion in streaming music in 2018? Did you do so through Apple Music or Spotify? Let us know how you listen to music these days in the comments below.