Streaming Growth Continues In 2017, According to RIAA Mid-Year Report

Sep 22, 2017

Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.

The State of the Music Industry, Mid-Way Through 2017 (Medium, via Recording Industry Association of America)
Benom’s Take: This week’s big story is the RIAA’s report on the state of the U.S. recorded music business mid-way through this year. It’s important to note that the terms “music industry” and “music business” are used broadly here. These numbers come from the recording industry side, meaning the report does not encompass all sectors of the music business (touring, publishing, etc).

Nevertheless, what happens on the recording side directly affects just about everything in the industry and we’re always encouraged to hear of positive growth. The RIAA report shows subscription streaming primarily contributed to a 17% increase in revenue with over 30 million paid subscriptions. In fact, about 80% of revenue came from multiple digital services.

The report also brings up some critical issues. While there is little difference in what streaming services provide to the listening public, there is a massive difference from service to service when it comes to the royalties paid to creators. This is the “value gap” most creators and professionals in the music industry are frustrated with.

“Free,” ad-supported streaming lags far behind paid subscription revenue, for instance ($1.7 Billion in subscription revenue v. $274 Million in ad-supported revenue).

Just compare YouTube and Spotify, for example. The RIAA report points out that it takes 1,000 “free” (ad-supported) streams on YouTube for a creator to earn $1 in royalties. Meanwhile my analysis figures it takes about 150 paid subscription streams on Spotify to earn $1 in royalties.

It’s worth noting that each paid service pays differently as well. For example, the royalties earned on the paid Tidal and Apple streaming services are reportedly higher than Spotify.

Overall though, it is good news that subscription streaming is continuing to drive the growth of the music business. Total streaming revenue has jumped 30% in less than two years, and that’s just amazing! Where could we be in another two years? We’ll just have to wait and see the final 2017 RIAA numbers to know how this year shakes out. Stay tuned.