Bulletin YOUR DAILY ENTERTAINMENT NEWS UPDATE FEBRUARY 25, 2020 Page 1 of 25 INSIDE US Recorded Music Revenue • Four Key Reaches $11.1 Billion in 2019, Takeaways From the RIAA’s 2019 Year-End 79% From Streaming: RIAA Report • What Is Password BY DAN RYS Sharing Costing Streaming & the The U.S. recorded music business generated $11.1 two years it bottomed out at $6.7 billion total from Music Business at billion in revenue in 2019, according to the RIAA’s its 1999 peak. Limited-tier subscriptions — which Large? annual year-end report, a 13% year-over-year increase includes services like Amazon Prime and Pandora • Coronavirus from the $9.8 billion it reached in 2018. That repre- Plus which do not provide full-catalog, unlimited on- Fears Hit Music sents the fourth straight year of double-digit growth demand access — accounted for $829 million of that and Entertainment for the sector, and a faster rate of growth over 2018, total. Paid subscribers to on-demand services reached Stocks when it increased 11.9% over the prior year. (Sales 60.4 million in 2019, up 29% over 2018’s 46.9 million, • Country Radio were up 16.5% in 2017 and 11.4% in 2016.) as subscriber growth and subscriber revenue continue Seminar: An Older Unsurprisingly, that growth was driven largely by to grow concurrently. Medium Looks for continued gains in streaming revenue, which grew Meanwhile, ad-supported on-demand stream- Youthful Passion 19.9% year-over-year to $8.8 billion from 2018’s $7.4 ing also grew significantly, up 20% over 2018, yet it billion, accounting for 79.5% of all revenue. That accounted for just $908 million in revenue. As the RI- • Paul Williams to Receive Johnny figure is also means that streaming revenue on its own AA’s report notes, “These types of services streamed Mercer Award at was larger than the entire U.S. recorded-music sector more than 500 billion songs to more than 100 million Songwriters Hall of in 2017, and higher than any year’s total revenue since listeners in the United States, yet contributed only 8% Fame 2008, and was the first time streaming surpassed 3/4 to total music revenues for the year.” Digital and cus- • Congressional of all revenue for the business. tomized radio revenue was down 4% year-over-year to Hearing on Within overall streaming revenues, paid subscrip- $1.16 billion, due to a 5% downturn in SoundExchange Ticketing to Cover tions accounted for $6.8 billion, up 25% year-over- distributions ($908 million), while ad-supported Transferability, year and making up 61% of the overall revenue total. streaming revenues remained flat at $251 million. Speculative Tickets That $6.8 billion is also itself larger than the entire Apart from streaming, several numbers stick out in U.S. recorded-music business in 2014 and 2015, the (continued) Republic_05_022920.indd 1 2/21/20 2:00 PM Page 3 of 25 IN BRIEF the sales model figures. For the first time physical and synchronization at 2.9%. ing to the RIAA’s annual year-end report, a since 2006, digital download sales revenue The RIAA’s numbers represent U.S. 13% year-over-year increase from the $9.8 dipped below the $1 billion mark, falling recorded music revenue at retail, not the billion it reached in 2018. 18% year-over-year to $856 million from actual amount taken in by labels. Accord- But within those numbers are a few last year’s $1.04 billion. Album downloads ing to the RIAA, wholesale revenue, the hidden gems that can be highlighted as dropped 21% to $395 million while digital amount collected by record labels, grew to trends to keep an eye on. Here are four key track sales fell 15% to $415 million, as the $7.3 billion in 2019, an 11% increase from the takeaways: overall download sector totaled just 8% prior year’s total of $6.6 billion. Prior year 1. Streaming growth rate is falling of all revenues for the year. Album down- numbers shown here may vary from what Revenue from streaming reached $8.8 loads accounted for 3.6% of revenues, while was reported by Billboard last year, as the billion in 2019, larger than the entire amount digital track downloads accounted for 3.7% RIAA continually updates its data as new of revenue generated by the U.S. recorded- of revenues, and ringtones still brought in information becomes available. music business in 2017, just two years $21.4 million, good for 0.2% of revenues. prior. But the rate of that growth dropped Yet physical revenue largely remained again, from 68.5% in 2016 to 43% in 2017 to stable, dropping just 0.6% year-over-year to Four Key 30.1% in 2018 to 19.9% in 2019. In absolute $1.15 billion. CD sales continued to drop — numbers, it’s a different story, as the revenue though not as fast as digital sales — as they Takeaways From growth generated has been fairly steady: a fell 12% to $615 million in 2019, with ship- jump of $1.6 billion in 2016, $1.7 billion in ments dropping 10.5% to 46.5 million copies the RIAA’s 2019 2017 and $1.71 billion in 2018. But 2019’s from the 52 million counted last year. But vi- jump was just $1.43 billion, suggesting that nyl continued its victorious return, balloon- Year-End Report revenue growth may finally be tapering off ing a whopping 19% year-over-year to $504 a bit — we emphasize a bit, of course, as it’s million, the format’s highest revenues in 32 BY DAN RYS still nearly a billion and a half dollars more years and its 14th straight year of growth. than the year prior. But a curve in the graph CDs made up 5.5% of overall revenues, he RIAA released its 2019 year- is beginning to emerge as streaming contin- while vinyl accounted for 4.5%; average list end revenue numbers for the ues to climb. price of a CD dropped to $13.21 in 2019 from U.S. recorded-music business 2. Subscribers up, paid subscription $13.43 in 2018, while vinyl averaged $26.05, Tuesday (Feb. 25) and for the revenue up, but... a jump from $25.10 the year before. Tfourth straight year it was full of great news The RIAA significantly altered its number Overall, digital accounted for 87.2% of in the form of double-digit percent increases of paid subscribers for 2018 from last year’s revenues in 2019, physical made up 10.3% of and a wealth of money coming in from paid report — it regularly updates its numbers revenues and synch royalties accounted for streaming. from year to year as more information 2.5% of revenues. In 2018, recorded-music The U.S. recorded music business gener- becomes available — dropping it to 46.9 mil- revenue broke out to 85.4% digital, 11.7% ated $11.1 billion in revenue in 2019, accord- lion subscribers from its initial 50.2 million DECISIVE INTELLIGENCE. DELIVERED DIGITALLY. CLICK HERE FOR FREE DELIVERY DIGITAL NEWSLETTERS PROMOTION Billboard’s Latin Fest+, now in its 30th year, is the Latin music world’s biggest gathering of dealmakers, power players and artists. These influential figures come together for a series of curated discussions, networking, performances, panels and parties. The highlight of the week is the Billboard Latin Music Awards, broadcast live on the Telemundo network in April. BILLBOARD’S 4/18 ISSUE WILL ON SALE APRIL 18 SPOTLIGHT THE FOLLOWING: AD CLOSE April 8 MATERIALS DUE April 9 LATIN FEST + WEEK • Preview the Billboard Latin Music Conference and Awards with BONUS DISTRIBUTION: a focus on the performers and BILLBOARD LATIN FEST+ 4/20 - 4/23 finalists for the most prestigious (Las Vegas), BILLBOARD LATIN honors in Latin music MUSIC AWARDS 4/23 (Las Vegas) • Profile Billboard’s special recipients of the Spirit of Hope, TO ADVERTISE, CONTACT: Lifetime Achievement and Hall of Fame awards MARCIA OLIVAL | 786-586-4901 [email protected] • The hottest and most relevant trends among Latin music’s GENE SMITH | 973-452-3528 labels and publishers [email protected] Advertise in Billboard’s April 18 Latin JOE MAIMONE | 212-493-4427 Music Week Issue to congratulate [email protected] this year’s honorees and finalists, and to position your company in front of the key decision-makers in the Latin music industry. bbHA_Latinfest_Ad.inddBB House_Latin Issue Sales_05_022920.indd 1 1 2/14/202/21/20 2:459:16 PMAM Page 5 of 25 IN BRIEF figure. This year, it calculated the number 14th straight year of growth. Not only that, billion in wholesale revenue in 2019, accord- of paid subscribers at 60.4 million, up 28.7% its rate of growth is accelerating even as its ing to the RIAA’s year-end revenue report (and 13.5 million) over last year’s adjusted baseline revenue increases, too — its 19% released Tuesday (Feb. 25). With wide- figures, while 2019’s $5.93 billion in revenue growth in 2019 is more than double the 8% spread dissatisfaction over current stream- from paid subscriptions (subtracting the it grew in 2018, an impressive feat. So let’s ing royalties, creators and labels should $829.5 million from limited-tier subs) is up do the math: If CD sales revenue declines happily welcome extra revenue. 27.5% from the $4.66 billion (again, subtract- at the same 12% rate in 2020 that it fell in If the $300 million in lost fees were ing limited-tier subs) calculated in the prior 2019, and even if we assume that vinyl’s 19% distributed pro rata, Universal Music Group, year.