Vinyl Sales Continue to Rise, but Streaming is the New King
(April 5, 2017) Once upon a time digital music sounded the death knell for compact discs, but in an odd twist of fate both digital music and compact discs appear to be headed to the same shallow grave. According to a new report by the Recording Industry Association of America (RIAA), digital music and CD sales incurred double-digit sales losses during 2016, a year that otherwise marked an 11-percent growth in retail revenue sales.
Much as digital music showered consumers with a convenience factor that compact discs can’t offer, it appears that streaming music platforms offer a level of service and features that digital music can’t repel. In fact, streaming music platforms now account for more than half of the U.S. music industry’s revenues after more than doubling sales numbers during the last year (up 114-percent). The charge in this $2.5 billion segment was led by Apple Music’s first full year of existence and strong growth from services such as Spotify Premium.
Streaming music’s strong surge is paired with an equally rapid decline in digital download revenues, which tallied $1.8 billion during 2016 (down 22-percent from 2015). Individual track download revenue fell the greatest amount, down 24-percent versus 20-percent for digital albums. Compact disc sales also slipped at nearly the same clip, posting a 21-percent decline to $1.17 billion.
That leaves us with vinyl, which has experienced nine straight years of impressive growth. Last year vinyl raked $430 million in U.S. sales, which accounted for 26-percent of total physical music shipments. For those of you keeping track, that’s vinyl’s largest share of overall shipments since 1985. That’s the year that Microsoft released its first version of Windows, “We Are The World” was recorded, Coca-Cola rolled out “New Coke,” and Nintendo introduced NES to North America.
Before you pat vinyl on the back, keep in mind it very much remains a niche format outside the halls of industry audio events. Last year, a study conducted by ICM Unlimited found a whopping 48-percent of vinyl buyers don’t play their purchases (7-percent of those surveyed didn’t even own a turntable). This suggests vinyl sales are driven by hipsters looking for a collectable they can display, rather than play.
The overall health of music sales still lags well behind industry’s best year in recent memory (1999). That year marked nearly $12 billion in CD sales and $14.6 billion in sales overall, which is double that of the industry’s combined revenue during 2016.
Much as digital music showered consumers with a convenience factor that compact discs can’t offer, it appears that streaming music platforms offer a level of service and features that digital music can’t repel. In fact, streaming music platforms now account for more than half of the U.S. music industry’s revenues after more than doubling sales numbers during the last year (up 114-percent). The charge in this $2.5 billion segment was led by Apple Music’s first full year of existence and strong growth from services such as Spotify Premium.
Streaming music’s strong surge is paired with an equally rapid decline in digital download revenues, which tallied $1.8 billion during 2016 (down 22-percent from 2015). Individual track download revenue fell the greatest amount, down 24-percent versus 20-percent for digital albums. Compact disc sales also slipped at nearly the same clip, posting a 21-percent decline to $1.17 billion.
That leaves us with vinyl, which has experienced nine straight years of impressive growth. Last year vinyl raked $430 million in U.S. sales, which accounted for 26-percent of total physical music shipments. For those of you keeping track, that’s vinyl’s largest share of overall shipments since 1985. That’s the year that Microsoft released its first version of Windows, “We Are The World” was recorded, Coca-Cola rolled out “New Coke,” and Nintendo introduced NES to North America.
Before you pat vinyl on the back, keep in mind it very much remains a niche format outside the halls of industry audio events. Last year, a study conducted by ICM Unlimited found a whopping 48-percent of vinyl buyers don’t play their purchases (7-percent of those surveyed didn’t even own a turntable). This suggests vinyl sales are driven by hipsters looking for a collectable they can display, rather than play.
The overall health of music sales still lags well behind industry’s best year in recent memory (1999). That year marked nearly $12 billion in CD sales and $14.6 billion in sales overall, which is double that of the industry’s combined revenue during 2016.
Last edited:
