According to the Mid-Year 2023 Report from the Recording Industry Association of America (RIAA), the US recorded music industry generated $8.4 billion in gross revenues in the first six months of 2023. This represents a 9.3% year-on-year growth in retail-based revenues. On a wholesale basis, the industry generated $5.3 billion, up 8.3% from the previous year.
Streaming services, including paid subscriptions, ad-supported platforms, and digital radio, played a significant role in driving the overall retail revenue growth. Revenues from streaming services grew 10.3% compared to the first half of 2022, reaching $7 billion and accounting for 84% of total recorded music revenues in the US.
Subscription services contributed the largest share of streaming revenues, with total revenues from paid subscriptions growing 11% year-on-year to $5.5 billion. This accounted for nearly two-thirds of total revenues and over three-quarters of total streaming revenues.
Ad-supported music streaming services experienced slower growth, with revenues from on-demand services growing only 0.6% to $870 million in H1 2023.
The number of paid subscriptions to on-demand music services increased 5.8 million in H1 2023, reaching 95.8 million. However, the pace of growth in paid subscriptions has been slowing down over the years, indicating a potential saturation point in the US market.
The acceleration in revenue generated from streaming in H1 2023 can be attributed to price increases at major music streaming services. Apple Music, Amazon Music, and Spotify all raised their subscription prices, leading to higher revenue per active subscription.
Revenues from physical music formats, such as vinyl records and CDs, also saw a 5% year-on-year increase to $882 million. Vinyl records accounted for 72% of physical format revenues, with revenues growing 1% to $632.4 million.
Overall, the RIAA’s mid-year report highlights a thriving and growing music ecosystem in the US, driven primarily streaming services. However, the slower growth in new subscription accounts suggests a need for recurring price increases to sustain future growth.
Sources:
– Recording Industry Association of America (RIAA)
– Music Business Worldwide
