RIAA’s 2015 year-end music sales & shipments report is now out with a unique and comprehensive look at the state of the U.S. music business. A quick snapshot reveals that streaming, now the largest revenue-generator for the industry, helped grow the overall business by just shy of 1% year-over-year, with paid subscriptions leading the way.
The U.S. recorded music industry continued its transition to more digital and more diverse revenue streams in 2015. Overall revenues in 2015 were up 0.9% to $7.0 billion at estimated retail value. The continued growth of revenues from streaming services offset declines in sales of digital downloads and physical product. And at wholesale value, the market was up 0.8% to $4.95 billion – the fifth consecutive year that the market has grown at wholesale value.
2015 was a milestone year for streaming music. For the first time, streaming was the largest component of industry revenues, comprising 34.3% of the market, just slightly higher than digital downloads.
All parts of the streaming music market grew in 2015, and total streaming revenues exceeded $2 billion for the first time ever. Combining all categories of streaming music (subscription, ad-supported on-demand, and SoundExchange distributions), revenues grew 29% to $2.4 billion.
Paid subscription services were the biggest – and fastest growing – portion of the streaming market. The launch of new services like TIDAL and Apple Music made this one of the most watched and talked about spaces in the industry. In 2015, revenues from paid subscriptions grew 52% to $1.2 billion. At the same time, the number of paid subscriptions grew 40% to an average of 10.8 million for the full year.
SoundExchange distributions grew 4% to $803 million, and on-demand ad-supported streaming grew 31% y-o-y to $385 million.
Digital accounted for 70% of the overall market by value, compared with 67% in 2014 (note Synchronization excluded from this figure). Even though digital download revenues (including digital tracks and albums) declined 10% to $2.3 billion, the total value of digitally distributed formats was up 6% to $4.8 billion, compared to $4.5 billion in 2014.
Total value of shipments in physical formats was $2.0 billion, down 10% versus the prior year. Vinyl LPs were up 32% by value, and at $416 million were at their highest level since 1988. Synchronization royalties were $203 million, up 7% versus the prior year.
Overall, the data for 2015 shows a music industry that continues to adopt digital distribution platforms for the majority of its revenues. While overall revenue levels were only up slightly, large shifts continued to occur under the surface as streaming continued to increase its market share. In 2015, the industry had the most balanced revenue mix in recent history, with just about 1/3 of revenues coming from each of the major platform categories: streaming, permanent downloads, and physical sales.
You can download the full report here.