The pandemic has accelerated the shift from physical to digital entertainment. As further evidence, in the first half of 2020, revenues from the sale of physical music products such as CDs and vinyl decreased by 23% year-over-year to account for only 7% of total US music industry revenues. But, as listeners feel nostalgia for the past, the vinyl sales have surpassed CD sales for the first time since the decade of MTV and neon leg warmers. This is per new data [pdf] from the Recording Industry Association of America (RIAA).
The data shows that in H1 2020, sales of physical music products in the US amounted to $375.5 million. This is compared to H1 2019’s revenues of $485.1 million.
RIAA does point out that the 23% year-over-year (y-o-y) decline in revenues is due, at least in part, to COVID-19 and the resulting closure of retail locations and venues during Q2. This is also reflected in data from Nielsen that found that while physical album sales actually saw a y-o-y increase in Q1 2020, sales between March 12 and July 2 plummeted, resulting in an overall y-o-y loss for H1.
It would appear that vinyl sales are what may be holding physical music sales aloft. Accounting for a full 62% of total physical music revenues in H1, vinyl brought in $232.1 million (up 4% y-o-y). This compares favorably to CD sales, which fell 48% y-o-y to a total of just $129.9 million. This severe dip in CD sales – as vinyl sales continue to rise year after year ($198.6 million in H1 2018 and $224.1 million in H1 2019) – indicates that when consumers do opt for a physical form of music, they are increasingly pulled towards the experience only vinyl can provide.
Even with the help of vinyl, which accounted for a mere 4% of total music industry revenue, physical music revenues only made up 7% of total revenues in H1. The lion’s share of revenues for the industry came from digital formats, specifically streaming (85%). Notably, digital downloads continue to slide, accounting for just 6% of industry revenues in H1, less than that of physical products.