Subscriptions drive much more streaming music revenue
Data: Recording Industry Association of America; Chart: Andrew Witherspoon / Axios
Streaming now represents the majority of music revenue in the U.S., and of that revenue, the majority comes from paid subscription services, like Spotify and Apple Music, according to a new Recording Industry Association of America report.
- Revenues reached record highs for the first half of the year among all music streaming categories, (paid subscriptions, digital and customized radio, and on-demand ad-supported streams).
- But paid subscriptions were by far the biggest driver of growth, growing 61% to $1.7 billion, more than 500% the amount of streaming ad revenue ($273 million).
Why it matters: User growth has been the main revenue driver, according to RIAA's Joshua P. Friedlander. There have been nearly 1 million new music subscriptions per month compared to the prior year, with total U.S. paid music subscribers reaching an average of 30 million for the first half of the year — a record high.
Whereas news publishers and legacy media outlets have struggled to create direct-to-consumer relationships on mobile, the music industry has revolutionized them, and consumers are clearly willing to pay for that premium experience.