Real-time music is taking over the recording industry, and there is no clear sign of this: digital download sales have declined so much in recent years that they are now smaller than sales of CDs, vinyl and other physical means, which has not been the case since 2011.
The statistics, which come from the recent final report of the RIAA 2017, show that digital downloads fell to $ 1.3 billion last year, while physical media, although they also fell, only decreased to $ 1.5 billion.
Of course, both pale in comparison to the revenues generated by the broadcast, which has taken over the music industry in recent years. In 2016, the music industry generated more than half of its revenue from broadcast for the first time, and that growth continued in 2017. Last year, almost two-thirds of all revenues, more than $ 5.7 billion, came from the transmission, an increase of 43 percent.
The units show millions of subscribers. Image: RIAA
This is due to the growing popularity of subscription services such as Spotify and Apple Music. But it turns out that there is a new category of fast-growing broadcast services that could soon be big business for the industry. They are called "paid subscriptions of limited level" and basically they are subscription transmission services with some type of important limitation. Amazon, for example, sells an unlimited music subscription of $ 4 per month that only works on a single Echo. Pandora's paid radio service, Pandora Plus, also falls into this category.
Despite the lack of attention in this category, it accounted for 14 percent of the underwriting market in 2017, up from 11 percent in 2016. That may sound very small, but represents a 125 percent growth in terms of revenue, growing every year. from $ 263 million to $ 592 million – larger than vinyl. That's huge for a segment that may well be growing due to the growing popularity of the Echo. Amazon's streaming service was not launched until the end of 2016, so it's likely to be responsible for a large part of that growth.
In a statement to The Verge, Amazon Music vice president Steve Boom said that the total hours of music aired using Alexa-compatible devices has already doubled this year. "In the US, we've seen that more than half of Amazon listeners used voice during the year, and compared to this period last year, we've already seen that the total hours transmitted on Amazon Music through of Alexa-enabled devices has doubled in the US Amazon Music listeners love to listen to music with Alexa, "said Boom.
Last year, revenue from paid subscriptions increased 55 percent, and revenue from broadcasting supported by ads increased 35 percent. Its continued growth has led to the growth of overall revenues for the music industry for the second year in a row, bringing it to $ 8.7 billion. It's a return to 2008 levels, which is a bright signal for the industry, especially since subscription services show no signs of slowing down. But as the RIAA notes, industry revenues are still 40 percent below maximum levels, and physical sales and digital downloads still have more to fall.