Recorded music industry revenues hit $8.4bn in the US in H1 – but paid streaming account growth slowed again
MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
The US recorded music industry generated USD $8.4 billion in gross revenues in the first six months of 2023.
That’s the headline stat from the Recording Industry Association of America’s (RIAA) Mid-Year 2023 Report, which, published Monday (September 18), shows that on a retail basis, recorded music revenues in the US (money spent on streaming subscriptions, as well as physical and digital music), grew 9.3% YoY.
On a wholesale basis – i.e. the money that makes its way back to record labels, distributors and ultimately artists – the entire US recorded music industry generated $5.3 billion in H1 2023 (see below).
According to the RIAA data, that was up by 8.3% YoY.
The report, which you can read in full here, shows that streaming (including paid subscriptions, ad-supported services, digital and customized radio, social media platforms, digital fitness apps, and others) made the largest contribution to that overall ‘retail’ revenue tally.
In the first half of 2023, revenues from streaming services grew 10.3% YoY, or by $600 million YoY, to $7 billion and accounted for 84% of total recorded music revenues in the US.
In revenue terms, the pace of growth in music streaming in the US accelerated versus the prior year (H1 2022), when total streaming revenues grew by $500 million YoY to $6.4 billion (see below).
Total revenues generated from paid subscription services grew 11% YoY to $5.5 billion in H1 2023, and accounted for nearly two-thirds of total revenues and more than three-quarters of total streaming revenues.
Revenues from ad-supported music streaming services grew at a much slower rate than subscription music streaming however: revenues from on-demand services (such as YouTube, the ad-supported version of Spotify, Facebook, and others) grew just 0.6% YoY to $870 million in H1.
According to the RIAA’s mid-year report, the number of paid subscriptions to on-demand music services also grew, but the pace of growth was slower than in prior years.
The average number of subscriptions through the first six months of 2023 was 95.8 million, up 5.8 million YoY (compared with 90 million for H1 2022).
(According to the RIAA, these subscription account figures exclude ‘limited-tier’ services and count multi-user plans as a single subscription.)
“The average number of subscriptions through the first six months of 2023 was 95.8 million, up 5.8 million YoY.”
As you can see from the chart below, the deceleration of growth in paid subscriptions in the United States is part of a multi-year trend.
- In H1 2020 the number of paid subscriptions to on-demand music services grew by 14.4 million YoY to 72.6 million
- In H1 2021, the number of paid subscriptions grew by 9.4 million YoY to 82 million
- In H1 2022, the number of paid subscriptions grew by 8.0 million YoY to 90 million
- And as mentioned, in H1 2023, the number of paid subscriptions grew by 5.8 million YoY to 95.8 million
Digging deeper into the numbers…
The acceleration in revenue generated from streaming in H1 versus the deceleration in growth of the number of paid subscriptions in H1 is likely related to price increases at major music streaming services in the first half of the year.
Apple Music upped its standard monthly subscription price in Q4 last year, while Amazon Music made a similar move in January. Music streaming giant Spotify increased the price of its flagship Premium subscription in the US to $10.99 in July.
The full revenue impact of this price rise in the market in H2 won’t be clear until RIAA publishes its full-year report in the new year.
“While growth in new subscriptions was slower in H1 2023 versus H1 2022, the subscription accounts that were already active in H1 2023 were paying more.”
While growth in new subscriptions was slower in H1 2023 versus H1 2022, the subscription accounts that were already active in H1 2023 were paying more.
However, the multi-year trend of slower growth in new subscription accounts in the United States could indicate that we’re inching closer to streaming subscription saturation point in the world’s largest recorded music market.
This means that recurring price increases, as called for by various music industry leaders, will become all the more important in the coming years if this slowing subscription account growth trend continues.
Elsewhere in H1, revenues from physical music formats (including vinyl LPs, CDs and other physical formats) reached $882 million in the US, up 5% YoY versus the prior year.
Revenues from vinyl records grew 1% YoY or by $9.8 million, to $632.4 million, and accounted for 72% of physical format revenues.
In spite of the modest revenue increase in the vinyl segment, there were actually fewer units of vinyl records sold in H1 2023 versus H1 2022 (23.4m vs 23.8m, respectively), which suggests that the price of vinyl is also going up.
“This report describes a thriving, growing music ecosystem that continues to reach new heights and shape our culture.”
Mitch Glazier, RIAA
Commenting on the results of the RIAA’s mid-year report, Chairman & CEO Mitch Glazier, said: “This report describes a thriving, growing music ecosystem that continues to reach new heights and shape our culture.
Added Glazier: “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.”
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