It's been a while since we heard much out of the RIAA after the organization was frequently in the news during its hunt to force anyone who even thought about illegally downloading music to pay damages. At times, the RIAA filed suits against deceased people essentially making it look like the bad guy to many music fans. The RIAA has now released information that looks at revenue statistics from 2017 and the music industry saw some growth last year.
According to the statistics, revenue from recorded music in the U.S. increased 16.5% to an estimated retail value of $8.7 billion. Wholesale revenues grew 12.6% to $5.9 billion. RIAA attributes most of the growth in the industry to paid music subscription services like Spotify, Amazon, Tidal, Apple Music, Pandora, and others. That revenue increased by more than 50% according to the data. RIAA does point out that it has taken a decade for the music industry to return to the overall revenue seen in 2008 and it is still 40% below its peak levels.
Growth in paid music streaming is being offset by continued decline in revenue from physical and digital unit sales. Looking at different segments of the industry RIAA's stats break things down for us and show that streaming music platforms accounted for nearly two-thirds of total U.S. music industry revenues in 2017. Streaming services revenues alone were $5.7 billion in 2017, or 65% of total industry revenue. On-demand streaming services that are supported by ad revenue, these are the free services run by Spotify and others, totaled $659 million in 2017.
Revenue from digital downloads fell 25% to $1.3 billion for 2017. This seems to indicate that more music fans are simply paying for streaming services rather than buying digital songs. This is the first time since 2011 that revenue from physical products exceeded revenue from digital downloads. Looking at revenue from physical products, shipments decreased 4% reports RIAA to $1.5 billion in 2017. However, there was a bright spot in physical product sales, and that bright spot is vinyl. Revenues from vinyl records were up 10% to $395 million while shipments of CDs declined 6% to $1.1 billion. CD sales have been so poor in recent years that Best Buy has announced that it will end sales of CDs this summer.