In the dynamic world of music, the numbers often sing their own tune. The Recording Industry Association of America (RIAA) recently released its Mid-Year 2023 Report, and the figures are like a chart-topping hit. In the first six months of 2023, the US recorded music industry orchestrated an impressive $8.4 billion in gross revenues.
This headline-worthy statistic, representing money spent on streaming subscriptions, physical and digital music, signifies a thriving industry. Year on year, recorded music revenues in the US on a retail basis surged by 9.3%, illustrating the music’s undying allure.
Digging deeper into the financial score, on a wholesale basis, which reflects the money that ultimately reaches record labels, distributors, and artists, the industry generated a substantial $5.3 billion in H1 2023. Compared to the previous year, this marks an 8.3% increase.
The report’s full details are available here, but let’s harmonize these numbers: streaming played a leading role in this crescendo of revenues. Services encompassing paid subscriptions, ad-supported platforms, digital and customized radio, social media, and digital fitness apps contributed significantly to this financial symphony. Notably, streaming revenues soared by 10.3% year on year, swelling to a whopping $7 billion in H1 2023, accounting for 84% of the total recorded music earnings in the US.
It’s essential to note that the pace of growth in music streaming accelerated compared to the previous year, with total streaming revenues escalating by $600 million YoY, a testament to the enduring popularity of streamed music.
Peering further into the streaming realm, revenues from paid subscription services stole the spotlight, ascending by 11% YoY to $5.5 billion in H1 2023. This category encompasses both full-premium and ‘limited-tier’ subscriptions. These subscriptions held sway over nearly two-thirds of the industry’s total earnings and over three-quarters of total streaming revenues.
However, within the realm of streaming, there’s a tale of two subcategories. While revenues from subscription-based streaming flourished, ad-supported music streaming services experienced more muted growth, with a modest 0.6% YoY increase, amassing $870 million in H1. The message is clear: consumers increasingly prefer premium, ad-free listening experiences.
Delving into subscription numbers, the report reveals that although the number of paid subscriptions to on-demand music services grew in H1 2023, the pace of growth was more relaxed than in previous years. During the first six months of the year, an average of 95.8 million subscriptions was recorded, marking a 5.8 million YoY increase compared to 90 million in H1 2022. Notably, this figure excludes ‘limited-tier’ services, counting multi-user plans as a single subscription.
Analyzing this trend over the years reveals a deceleration in growth, suggesting that the US might be approaching a saturation point for streaming subscriptions, given its status as the world’s largest recorded music market.
This development emphasizes the importance of recurring price increases, a strategy championed by various industry leaders, as slowing subscription growth may become the norm.
It’s not all digital, though. Physical music formats, including vinyl LPs and CDs, recorded revenues of $882 million in H1 2023, marking a 5% YoY increase. Within this segment, vinyl records, a beloved format for audiophiles, notched up 1% YoY growth, reaching $632.4 million, representing 72% of physical format revenues. However, it’s noteworthy that despite the modest revenue increase, fewer vinyl records were sold in H1 2023 compared to H1 2022, suggesting that vinyl prices may be on the rise.
RIAA’s Chairman & CEO, Mitch Glazier, summed up the report’s findings eloquently: “This report describes a thriving, growing music ecosystem that continues to reach new heights and shape our culture. And it reflects the creative human genius and hard work of all the artists, songwriters, labels, publishers, and services who make the music happen and meet fans and audiences where they are in today’s forward-looking and innovative music community.”
In a rapidly evolving industry, these numbers are not just figures; they are the heartbeat of an ever-evolving musical landscape.
