Subscription music services dominate, music downloads fall below $1 billion

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Music licensing company takes aim at Apple Music for illegal streaming
It's all about the music subscription services these days.
Photo: Stas Knop/Pexels CC

Music streaming subscription services grew 13% in the United States in 2019, while iTunes-style downloads continued to decline.

According to a new report by the Recording Industry Association of America (RIAA), streaming accounted for 79% of the overall music industry in the U.S. Physical sales, such as CDs and vinyl accounted for 10%, while downloads experienced the biggest decline — making up just 8% of revenue.

This was the first year since 2006 that money from paid downloads came in at less than a billion dollars. Compare that to an event that happened 10 years ago this month in the form of iTunes’ 10 billionth sale. That coincided with the iTunes Store officially becoming the largest music vendor worldwide.

A blog from RIAA chairman and CEO Mitch Glazier noted that “two things are abundantly clear: Paid subscription streaming is driving the return to growth; and achieving long-term sustainable success still requires good public policies.”

The streaming services battle

Apple Music is currently duking it out with Spotify as the two subscription music services market leaders in the U.S. Apple Music had 60 million paid subscribers in June, the last time Apple executives revealed paid sub numbers. At the time, Apple Music was growing at 20% annually. That means Apple Music could currently have around 70 million subscribers.

Spotify, meanwhile, reportedly had 124 million paid subscribers at the end of 2019. These figures are growing at a rate of approximately 29% year-over-year. That gives Spotify a comfortable lead. A recently released book from a former App Store manager at Apple suggests that Apple missed the threat of Spotify until it was too late. “We were rather arrogant and short-sighted and were punished for it,” the author wrote.

Unlike Spotify, Apple Music does not offer a free listening tier for non-paying customers. In good news for Apple, the RIAA report notes that there was 25% year-over-year growth in revenue from paid streaming services. The number of paid subscriptions rose 29% to hit a total of 60.4 million in the U.S. That’s 5x the number of music streaming services from four years ago.