RIAA Mid-Year 2023: Revenue Grows Nearly 10%; Vinyl, Streaming Slow

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The U.S. music industry continued its robust growth in the first half of 2023, according to the RIAA’s latest mid-year report. Total revenues grew 9.3% at estimated retail value, reaching an all-time first-half high of $8.4 billion; at wholesale value, revenues grew 8.3% to $5.3 billion.

Paid streaming subscriptions continued to be the strongest driver of revenue growth, according to the report, increasing by more than $550 million and growing to around 96 million subscriptions during the period.

Vinyl revenue leveled off, growing just 1% — it posted 22% growth in the same period last year — but physical formats reached their highest level since the first half of 2013, a full decade ago. Total physical revenues of $882 million were up 5% year over year, with vinyl growing 1% to $632 million — accounting for some 72% of physical format revenues. For the third consecutive year, vinyl albums outsold CDs in units (23 million vs. 15 million).

Total revenue from paid subscription services grew 11% to $5.5 billion, compared with 6% growth for the number of accounts. Nearly two-thirds of total revenues – and more than 75% of streaming revenues – came from paid subscription services.

Streaming revenue made up 84% of total recorded music revenues in the U.S., growing 10.3% to $7.0 billion — the fourth consecutive year that streaming accounted for 83-84% of total revenue. (This category includes paid subscription services, ad-supported services, digital and customized radio, and licenses for music on social media and digital fitness apps.)

However, the growth in the number of paid subscriptions to on-demand music services is slowing down. The average number of subscriptions through the first six months of 2023 was 95.8 million, compared with a growth of 10% to 90 million for the first half of 2022. (These figures exclude limited-tier services and count multi-user plans as a single subscription.)

Revenues from music streaming services based on advertisements also grew at a slower rate than paid forms of streaming. On-demand services (such as YouTube, the ad-supported version of Spotify, Facebook, and others) were up just 1% to $870 million.

Digital and customized radio music revenues grew 16% to $657 million in 1H 2023. The category includes SoundExchange distributions for revenues from services like SiriusXM and internet radio stations, as well as payments directly paid by similar services. SoundExchange distributions grew 7% to $498 million, while other ad-supported streaming revenues of $159 million were up 57%.

Finally, revenue from digital downloads continued its long decline, down 12% year over year to $225 million. Digital album sales were down 12% to $107 million while individual track sales were down 14% to $97 million. Downloads accounted for just 3% of U.S. recorded-music revenues in the first half of 2023.

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