U.S. recorded music revenues between 1999 and 2019 (source: RIAA)
Despite the prevalence (and continued growth) of streaming, U.S. recorded music revenues are down about 50 percent from 1999’s peak.
The Trichordist, an artist-rights blog created by Cracker frontman David Lowery, recently shed light upon the shocking statistic. Compiled annual data from the Recording Industry Association of America (RIAA) shows that U.S. recorded music revenues exceeded a whopping $22.4 billion in 1999, before dropping each year until 2014 (save for a slight rebound between 2003 and 2004).
Since 2015, recorded music revenues have experienced year-over-year growth in America, but the figure touched just $11.1 billion in 2019 – less than half of the 1999 peak.
Undoubtedly, the data raises serious questions about exactly how much revenue music streaming brings in – and, more importantly, how much of the income ultimately reaches artists.
According to the Trichordist, streaming’s “fundamental problem…is that revenue does not grow with consumption.” In this way, the analysis specifies that heavily-streamed, big-name artist releases serve to further divide (and exhaust) the limited amount of capital that platforms distribute to rightsholders. Consequently, per-stream compensation is driven down because plays increase at a much quicker rate than earnings, potentially hitting up-and-coming artists the hardest.
Also worth mentioning is the always-increasing size of streaming services’ libraries.
While exploring the technical nuances and success factors of the songs on Spotify’s RapCaviar playlist, we mentioned that the leading music streaming service adds nearly 300,000 tracks to its library weekly, or roughly 15 million songs annually. Additionally, DMN was first to report on Spotify’s Q2 2020 financial performance, including a two percent boost in overall quarterly income, as well as an 11 percent downturn in cash generated by ad-supported accounts. Both these points – and the larger implications of a flat subscription fee and variable ad-based income – provide more context yet to the 50 percent drop in overall recorded music revenues that the last two decades have brought with them.
Many artists and fans are voicing their opinions of streaming revenue under the #FixStreaming hashtag.
“A million Spotify streams in Ireland gets you approx $4,571.97 (€3,864). That’s the same as approximately 400 CDs or 200 vinyl records. The game is up,” wrote one individual, whose message also included the aforementioned hashtag.
On Tuesday, we reported that Spotify and YouTube were cracking down on millions of “fake” streams garnered by BTS’s first all-English track, “Dynamite.” The plays in question appeared to derive largely from diehard fans’ repeat-streaming habits (not bots), leading some to ask whether the adjustments were fair.
And specifically on the topic of streaming-service revenue, Kobalt Music subsidiary AWAL made headlines for stating that “hundreds” of its artist take home $100,000 or more from streaming annually – and, equally as notably, that a surprising number of its signed acts earn over $1 million from streaming each year.
Lastly, Spotify CEO Daniel Ek recently offered some controversial advice to artists who are unhappy with the royalties they’re receiving from his platform: work harder and release more music.
The music community responded with advice of its own.
So many people seem to think that the music business is a great business to get into. And when I read articles about the business all they seem to say is “more opportunities than ever for musicians to get into the music business” but then no mention about the 50% drop in revenues! And no mention of the 60% of Pro musicians who have quit the business! Stay away from this dreadful business. Don’t waste your time trying to make money with new music. You will regret it! Fans want free music and why are revenues down 50%?? Oh yes, nobody wants to pay the musicians!
The people that think that are the ones who have always wanted to be in it (probably for the wrong reasons), but aren’t. Many of the people in the music business have jumped ship already to other things like real estate or retired. It’s a bullshit business that isn’t failing upward.
The facts are clear. The Big 3 Labels that control the music industry, and have ruined the quality of music, are found to be terrible businessmen too.
Yet they are still propped up!
Many analysts fail to consider that the so called “1999 peak” should more accurately be qualified as a “bubble”.
Back then, an ordinary family had a budget for music as there were almost no alternative for “cultural goods” : a single phone line, wired at home, no personal computer, no internet, no smartphone, no “home cinema” 4K/DTSx/Atmos, not as many subscription based TV channels, etc.
It does not take a PhD in economics to guess where the money went…
Sorry Patrice but there were plenty of competing economics in 1999, including but not limited to movie theaters, console videos games, dvd and home video sales at an all time high, cell phone bills, internet connectivity (napster wasn’t operating by carrier pigeon), etc, etc. What changes? Music became illegally free without consequence. That’s not a bubble, it’s a regulatory failure.
When you read that FOUR OUT OF FIVE people in Spain still STEAL MUSIC, do the musicians realize that when they spend a lot of money and many months recording new music that the majority of people (80%+) in Spain just go steal their work and avoid paying them? And so what is the solution? STOP making new music for all these thieves and freeloaders, and take all your music off the Internet. Music fans in Spain are not nice people. THEFT OF PRODUCT will kill almost any business and until the music fans understand that making good quality music costs a lot of money we are fighting a losing battle with these thieves! Our “if you don’t give us your music for free, we’ll just go steal it anyway” friends have created a new ‘business model’ which is more than unfair, it is a disaster for the musicians and for the future of quality music!