Paid music subscriptions in the US continue their ascent. Recent data released by the Recording Industry Association of America (RIAA) show that paid music streaming services in 2021 gained another 8.5 million subscriptions over the previous year to reach 84 million, a year-over-year increase of more than 11%.
Growth in paid streaming music subscriptions precedes the pandemic, but clearly received a boost in the pandemic’s early days, when they soared from 60.4 million in 2019 to 75.5 million in 2020. Given that growth and the double-digit increase again last year, the average number of paid music subscriptions in 2021 was 2.4 times higher than in 2017, when the average number of subscriptions totaled 35.3 million. However, it is true that growth has slowed over the past year, something to be expected as an industry matures.
Nonetheless, survey data suggests that more people now stream music on a daily basis than listen to the radio.
Streaming Contributes More Than 80% of Recorded Music Revenues
Last year, streaming accounted for a full 83% of all US recorded music revenues, which is about equal with its share of total revenues from 2020. Physical (11%), digital downloads (4%) and synchronization royalties (2%) made up the remaining share of recorded music revenues, as physical revenues grew slightly at the expense of digital downloads.
It’s important to note that, per RIAA, “streaming encompasses a wide range of formats including paid subscriptions, ad-supported music streaming services, digital and customized radio, and licenses for music on Facebook and digital fitness apps.” This report also includes US TikTok music revenues for the first time.
All of these streaming sources combined to generate $12.4 billion in revenues last year, up 24% year-over-year. Revenues from paid subscriptions totaled $9.5 billion, up 23% year-over-year. That $9.5 billion figure (about three-quarters of total streaming revenues) equates to almost two-thirds of total recorded music revenues.
Meanwhile, ad-supported services, as in the video space, are seeing fast growth. In fact, revenues from ad-supported on-demand streaming surged by 47% last year to $1.8 billion, a significant acceleration from the 18% growth registered in 2020.
Digital Downloads Continue Descent; Physical Enjoys Rebound
Revenues from permanent digital downloads fell again last year to $587 million, down 12% from $665 million in 2020. Individual track sales fell at a faster rate (-16%) than album sales (-12%), with digital album sales accounting for slightly more revenues ($282 million) than individual track sales ($256 million). Digital downloads’ share of total US recorded music revenues in 2021 – at just 4% – sits at a fraction of its peak of 43% registered in 2021.
It’s a different story for physical products. As the RIAA notes, 2021 was the first time in 25 years that both CDs and vinyl records experienced revenue growth. Continuing the milestones, the 61% increase in vinyl record revenues – representing the 15th consecutive year of growth – brought the vinyl market to $1 billion, the first time hitting that mark in 35 years.
About the Data: The number of paid streaming subscriptions does not include limited tier services (paid subscriptions for services limited by factors such as mobile access, catalog availability, product features, or device restrictions) and counts multi-user plans as a single subscription.