The music industry is bouncing back in 2021, with a spike in revenue from CD and vinyl sales — which took a hit in 2020 from forced retail closures due to the pandemic — and a surge in streaming, which has become the main revenue source for artists and record labels amid the coronavirus pandemic.
Industry trade group the Recording Industry Association of America (RIAA) reported music retail revenues in the U.S. grew 27% in the first half of 2021 to $7.1 billion, up from $5.6 billion last year.
A majority of music revenue over the past year came from streaming (84%), followed by physical CD and vinyl sales (10%), digital downloads (5%) and music copyright licenses (2%).
Paid subscriptions to platforms like Spotify and Apple Music, which pay music rights holders a percentage based off number of streams, led revenue growth, comprising nearly two-thirds of total revenue ($4.6 billion) with more than 80 million paid subscriptions recorded for the first time.
With live concerts, tours and events cancelled, rescheduled or set at a limited capacity throughout 2020-2021, artists have increasingly needed to rely on streaming apps like Spotify or popular social media apps like TikTok for revenue.
CD and vinyl sales grew from $393 billion last year to $690 billion, with vinyl sales leading the surge in revenue, almost doubling from $241 million to $467 million and beating out CD sales for the second year in a row.
RIAA CEO Mitch Glazier also noted that new platforms like “short form video, fitness apps and chat and social apps” that license music are picking up, and record labels are working to “make sure these growing services pay for the music they depend on.”
The RIAA said the coronavirus has continued to affect music industry revenues with tour cancellations and retail closures throughout the pandemic. The music industry is slowly bouncing back from lower revenue numbers last year, which saw a decline in advertising revenue growth across platforms like YouTube and Spotify by about 14%. CD and vinyl sales also took a hit in early 2020 due to forced retail closures at the beginning of the pandemic, with revenue totaling $1.1 billion, slightly lower than previous years. Digital download revenue decreased by 18% in 2020 compared to the year before, continuing a downward trend year by year. Apple Music recently revealed in a letter obtained by the Wall Street Journal, it pays music rights holders one-third to one-half penny per stream, while Insider found Spotify pays between $.003 and $.005 per stream. With other revenue streams taking a hit from the pandemic, and streaming growing in popularity, The Union of Musicians and Allied Workers called for music streaming services to pay out more per streaming for music rights holders. Forbes