Streaming Surge Turns U.S. Recorded-Music Sales Up to $11bn

Revenue grew 13% in 2019 to the highest point in more than a decade, with streaming accounting for 80% of overall revenue

Recorded-music sales in the U.S. grew 13% last year to $11.1 billion—their highest point in more than a decade—as revenue continued to surge from streaming services such as Spotify and Apple Music.

Streaming accounted for 80% of overall revenue in 2019, the industry’s fourth consecutive year of growth, according to a report from the Recording Industry Association of America, a trade group for record companies.

That includes premium subscription services, ad-supported on-demand services, such as

YouTube, Vevo and Spotify’s ad-supported tier, and streaming radio services such as Pandora and SiriusXM. With revenue of $8.8 billion in 2019, streaming alone was larger than the entire U.S. recorded-music market in 2017, according to the RIAA.

The immense growth comes primarily from Americans opting to pay a monthly fee for unlimited access to vast catalogs of music on services such as those offered by Spotify Technology SA, Apple Inc. and Amazon.com Inc. Subscriptions topped 60 million in 2019, with revenue up 25% to $6.8 billion, as paid services added more than one million new customers a month.

Revenue from ad-supported on-demand streaming services such as Alphabet Inc.’s

YouTube and Spotify’s free tier, meanwhile, grew 20% year-over-year to $908 million.

Americans streamed more than 1.5 trillion songs in 2019.

The music industry has been on an accelerating tear since 2016, when growth from streaming services began to outweigh a 15-year decline in compact-disc sales. Still, overall sales are about 75% of their 1999 peak of $14.6 billion.

Last year, sales of physical products fell less than 1% to $1.15 billion as a 19% lift in vinyl— logging the format’s biggest revenue since 1988—helped offset a 12% decline in revenue from CDs.

Digital download sales fell 18% to $856 million, the first time revenue from such tracks and albums came in below $1 billion since 2006.

Downloads, which once offered a brief reprieve from cratering physical sales, accounted for just 8% of overall revenue in 2019.