Domestic recorded music revenue climbed almost 9% in H1 2022, buoyed by another strong 6 months of new vinyl sales. Record sales rose 22% in the first half of 2022, according to the Recording Industry Assn. of America’s mid-year report released on Wednesday.
That 22% increase might pale in comparison to the 97% increase during the same period in 2021, but the circumstances were very different. With the pandemic still raging, record stores were mostly still shuttered, but still thriving from rather brisk online sales and 4 Record Store Day events.
With live music venues still closed, limitations on theater capacity for films, and pro sports teams limited to 50% or less in terms of attendance, recorded music and streaming were the two safest options for consumers.
Fast forward 12 months, the pandemic is officially over, and consumers are traveling in record numbers and spending on other activities that were prohibited during the pandemic.
Inflation and supply chain issues have also impacted how much consumers are willing and able to spend on non-essential goods.
Total music industry revenue climbed 9% to $7.7 billion at estimated retail value; total streaming revenues rose 10% to $6.5 billion, and paid streaming subscriptions are up to 90 million, with their revenues rising 10% to $5 billion and comprising almost 66% of total H1 2022 sales.
The 10% increase in streaming revenue is great news for platforms like TIDAL and Qobuz which are becoming more popular with mainstream music listeners. Spotify might still drive the music streaming business, but the size of their domestic customers base is not growing as much anymore with strong competition from Apple, Amazon, TIDAL, and Qobuz.
Streaming represents 84% of total revenue, with physical next at 10%, digital downloads at 3% and synch at 2%.
Year 14 of the vinyl revolution saw the number of units shipped rise 15.7% over the same period last year — from 18.8 million to 21.8 million. That represented an increase of over $110 million in sales to $570.2 million in H1 2022.
All of that early optimism about the resurgence of CDs might have been misplaced.
New CD sales reversed their 2021 gains, going from 18.4 million to 17.7 million and $204.3 million to $199.7 million.
Physical media only represented only 10% of total revenue in H1 2022 and it will be interesting to see if vinyl can remain a strong seller through the Christmas season.
Record Store Day 2022 Black Friday is just around the corner and there is already a big marketing push on the part of music labels and indie retailers to make it a success.
“Today’s report is good news for artists, songwriters, streaming services, and fans — everyone with a stake in music’s future,” said RIAA chief Mitch Glazer. “We truly are seeing the power of recorded music’s rising tide to lift all boats across the music family.
“Indeed, artists share of music revenues have risen faster than labels’ and a recent UK study found that label investment in artists has doubled over the last five years while A&R spending on new talent has grown two and a half times faster than company revenues. Songwriters and publishers have seen tremendous growth as U.S. collectives like ASCAP and BMI reported record payments reflecting an increase in the writer/publisher share of music revenues of 50% since the CD era. Digital services also have had unprecedented success as earnings at just one major service rose 22% last year pushing it to over 400 million active listeners worldwide. And 2022 is already shaping up as one of the strongest years ever for live music — roaring back after the long struggle against the pandemic.”