The growth of recorded music in the United States has continued, with one report citing that revenue of $15 billion was generated for the year. The increase in streaming is one of the main drivers of this growth, also including solid vinyl, CD sales, and revenue of TikTok music for the first time.
In reality, all main formats of the music posted a gain over the prior year, excluding digital downloads.
Paid subscriptions persisted in giving the music an advantage, driving revenue into the sixth consecutive year of growth. In 2021, wholesale revenues reached up 22% to $9.8 billion.
While the $15 billion number is itself a record, when accommodated for inflation, it’s about 40% lower than the last record of $14.6 billion in 1999.
Streaming is a broad category of services that includes ad-supported music streaming services, paid subscriptions, licenses for music on Facebook, digital and customized radio, and digital fitness apps.
From Pandora to Spotify and Apple Music to YouTube, streaming has become as ubiquitous as the internet itself. By RIAA, source streaming took 83% of the total revenue.
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The success of streaming services has proven that consumers are willing to invest in a service they believe will provide them with the music they want on a convenient platform. Streaming can be seen as a model for other industries such as advertising, marketing, and retail.
Streaming services are taking over the world. There are so many different types of streaming available that it can be hard to know where to start. These platforms charge a monthly fee and offer similar features, but they do have one thing in common they’re all changing the way people listen to music.
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TikTok’s revenues were also the greatest driver, increasing 24% over 2020 to $12.4 billion. It accounts for 83% of total revenues, similar to 2020.
U.S. Recorded Music Revenue
Revenues from premium subscriptions continued to account for the lion’s share of revenue in 2021 and grew 23% to $9.5 billion.
Between 2019 and 2021, paid subscription revenues grew by 40% while the average number of paid subscriptions grew by 39% in the same period. It does not include limited-tier services, counted as a single subscription.
The music industry has embraced new technologies and innovations more than any other industry over the last ten years. As a result, the music business is now fully digital, from working on niche products to driving the next generation of social apps.
In addition to this growth in revenue, the company is optimistic about its revenue from new paid subscriptions.
The U.S. recorded music business is in flux as the industry adapts to new technologies and consumer preferences.
The digital era has taken much change, opening up opportunities for artists to reach audiences on a global scale with their music and creating challenges for artists who rely on physical sales and touring to make money from their craft.
Major record labels are re-evaluating their business models, including the ability to produce and sell high-quality music. The recording industry is also restructuring to return it to its original purpose of selling music.
A Bright Future
The U.S music industry is expected to see significant growth in both new and old media shortly. While much of this growth is likely to be driven by new and expanding markets, it is also possible that existing markets such as pop music may see a boost.
These opportunities will be great for the U.S records industry, an exciting new opportunity for distributing music in a global market that is often far more remote and challenging than the U.S.
The future of the U.S records industry is very bright. All stakeholders need to recognize the opportunities and work towards creating a prosperous future for the industry.