Each year, the Recording Industry Association of America (RIAA) publishes key industry metrics; for 2017, streaming was the star, at the expense of almost all other music outlets (full PDF report).
The good news is that music industry revenue grew by 16.5 percent—about five points higher than 2016. This statistic alone should satisfy those who still believe that the industry is dying out; to the critics’ credit, the industry as a whole has only seen growing revenues for a couple years. Leading this growth is streaming, which went up by 43 percent (56 percent growth in paid subscription revenue). Streaming now accounts for 65 percent of total industry revenue, with physical sales at 17 percent and digital downloads at 15. Synchronization licenses are about three percent.
Even though physical CD sales are down and synch licensing is a small part of the entire pie, both vinyl and synch saw significant growth in 2017 (10 percent for vinyl, 13.5 percent for synch). If you haven’t caught on to the trend, you might be surprised to learn that 77 vinyl titles each broke the 20k benchmark (with the highest, the Sgt. Pepper’s remaster, sitting at 72k copies); vinyl totaled 14 percent of all physical sales. I just have to mention, the new mix of Sgt. Pepper’s is brilliant; it’s exactly what you’d expect if a studio took the original recordings and mixed/mastered them to modern standards (and you don’t have to get it on vinyl).
The return of vinyl highlights a larger trend of premium merchandise and has been buoying up physical sales as regular albums fall. Taylor Swift’s 70-page magazine/CD combo of Reputation (with 2 versions of the magazine, to charge some fans double) and The Eagles’ $70 box set, now $200+, of Hotel California (with 5.1 Blu-ray Audio mix) are good examples of how small numbers of die-hard fans can add significantly to total sales numbers (story at Billboard).
One of the biggest losers was the digital downloads category, which fell by 25 percent. By comparison, physical products only went down by four percent (six percent for CDs). The Digital Music News published a scare that Apple was going to retire music downloads from iTunes entirely in a couple years—a fact that has been completely denied by Apple. Even though they aren’t getting rid of downloads in the near future, streaming is rapidly replacing most other industry sales.
So which artists did the best? “Despacito,” “Shape of You” and “Humble” were the biggest singles. Ed Sheeran’s Divide topped the album charts, with Kendrick Lamar and Taylor Swift not far behind (story at ProSoundNews).
In legal news, fractional licensing for performance royalties (a practice that has been in operation for a long time) is officially allowable by rights collection agencies like ASCAP and BMI. This system allows multiple parties to be paid for the same performance of a copyrighted work.
One battle in progress is the Music Modernization Act, which will allow the courts tasked with setting performance royalty rates to consider sound recording royalty rates in their decisions. The act will also increase the variety of judges who hear cases, a consideration of free-market conditions while setting compulsory “cover” license rates, and the creation of a digital database of songs and their owners’ information (with an ability for a publisher to claim songs).
The CLASSICS Act is another hot case that is intended to set market-based standard rates for digital platforms and help artists who recorded music before 1972 receive royalties from digital radio (story).