Streaming Music Helped The Music Industry Grow By Double-Digits In 2017

While it doesn’t sell like it used to (in fact, it doesn’t really sell at all), recorded music continues to be a business worth billions in the United States, and revenue is climbing all the time. 2017 was a big year for the music industry, and while there is plenty that certainly isn't perfect, the numbers prove that things are getting better across the board. The RIAA (Recording Industry Association of America) recently released its annual year-end report, which details how much money found its way into the music industry and where it all went, and while there aren't many shocks in regards to which forms of consumption championed the business, the numbers are encouraging.

In 2017, revenue from all recorded music grew to $8.72 billion, a high point not seen in about a decade. That number is up over $1.2 billion, or 16.5%, from 2016, when things were up about as much from the year prior. The industry has now been enjoying double-digit overall growth for two years in a row, and there’s no sign that the success will slow down. In fact, it’s ramping up, and when the numbers are finalized for 2018, 20% growth wouldn’t be out of the question.

It should come as no surprise that streaming powered the vast, vast majority of that expansion, as the vertical is now responsible for almost two-thirds (65%) of all revenue derived from recorded music. Streaming revenues added up to an impressive $5.7 billion in 2017, which is up dramatically from just under $4 billion in 2016 and $2.3 billion in 2015. The field grew 43% year-over-year, which is an incredible showing, especially for a category that has already been performing so well the past several years.

Those paying for some kind of on-demand streaming poured the most money into the field, with that group of consumers now contributing almost $4.1 billion to the industry. There are now slightly more than 35 million people who choose to pay for their on-demand listening privileges, and they are injecting the most much-needed cash into the industry.

A vertical the RIAA refers to as “digital and customized radio services,” which includes companies like SiriusXM and internet radio stations, brought in close to $1 billion ($914 million) in 2017, which is down quite a bit from the year before. While the money coming from that world seems to be shrinking, it’s still more valuable than the next source of income.

Ad-supported streaming numbers continue to climb as well, though they are far behind on-demand when it comes to revenue. Services that offer free, ad-supported tiers, such as Spotify and YouTube, only made $659 million in 2017. That number might not sound impressive considering the over $4 billion being earned thanks to on-demand products, but it is still up by over one-third.
