Over the past few years, streaming services such as Spotify and Apple Music have revolutionised the way we listen to music. According to recent figures published by the Recording Industry Association of America (RIAA), streaming, both ad-supported and subscription-based, accounted for 83% of music industry revenues in the US last year, up from less than 10% in 2010.
At $7 billion, paid subscriptions accounted for the lion’s share of streaming revenue in 2020, which in total amounted to $10.1 billion. To put that in perspective, all physical music sales combined amounted to just $1.1 billion last year, with downloads adding another $674 million to the music industry’s total haul of $12.2 billion.
Interestingly, the streaming revolution hasn’t been the first complete shift in music consumption over the past 30 years. As the following chart, based on historical RIAA figures, shows, vinyl records, cassettes, CDs and downloads have all been the predominant form of music consumption at some point in the past three decades, with the compact disc’s reign particularly long and lucrative for the music industry.
Inflation-adjusted music revenue peaked in 1999 at $22.7 billion at a time when the CD was also in its prime. That year CD sales alone amounted to $20 billion, more than twice the recording industry’s total revenue for 2018. After hitting a low point in 2014, the music industry started recovering: thanks to the steep increase in streaming subscriptions, 2020 marked the sixth consecutive year of growing music revenues.