RIAA: Physical Record Sales Topped Digital Downloads in 2017

In a twist, sales of old-school music records in 2017 bested digital downloads for the first time since 2011, according to year-end data released March 22 by the Recording Industry Association of America (RIAA).

Shipments of physical product decreased 4% to $1.5 billion compared to 2016 – a lower rate of decline than in recent years. Sales digital downloads fell 25% to $1.3 billion.

Vinyl continues to be a bright spot among physical formats, with sales up 10% to $395 million. Shipments of music CDs continued to decline, falling 6% to $1.1 billion. Revenue from shipments of physical product made up 17% of the industry total. Sales of track downloads fell 25%, and digital album sales decreased 24% versus 2016.

The aforementioned stats – however appealing to traditionalists – pales in comparison to the industry’s 800 lb. gorilla: subscription streaming.

More than 80% of total music revenue in 2017 was generated by digital platforms and services.

Streaming music services generated $5.7 billion in revenue. Paid music subscriptions drove the bulk of that — exceeding $4 billion for the first time — and now represent the largest recorded music format by value.

“More than any other creative industry, music companies successfully transformed themselves ahead of the transition to streaming, all while forging stronger relationships with their most important partner: the artist,” RIAA CEO Cary Sherman said in a statement.

Sherman cautioned that growth in music sales has only returned the industry to 60% of its peak 18 years ago. At the same time, he said the burgeoning streaming business inadequately compensates artists.

 “We continue to operate in a distorted marketplace, replete with indefensible gaps in core rights, inhibiting investment in music and depriving recording artists and songwriters of the royalties they deserve,” Sherman said.

The executive said Congress appears ready to pass updated reforms – dubbed “Classics Act” – aimed at better compensating artists at a market-based standard rate. Under current law, legacy artists who recorded music prior to 1972 are not guaranteed royalties when their music is played on digital radio.

“The proposed legislation would ensure that all recordings are treated the same,” Sherman said.


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