The music industry generated $7.1 billion in sales in the United States last year, down 0.9 percent from 2011, according to a statement released by the Recording Industry Association of America (RIAA). Why this will be nearly cause for celebration at the major labels is that flat annual sales are far better than the double-digit percentage declines that plagued the sector for most of the past decade.
No doubt, many in the music business were hoping for a second consecutive year of increased sales. Revenue rose slightly from $7.0 billion in 2010 to $7.1 billion in 2011. Given that the sector is half the size it was in 2000 when it reported $14 billion in sales, the RIAA says the back-to-back years with a small increase and flat sales is a sign the industry may be stabilizing.
Access models, such as Spotify and YouTube make up 15 percent of the music industry's total revenue
In its report, the RIAA said digital sales in 2012 topped $4 billion for the first time and were up 14 percent from 2011. Driving that growth were what the RIAA calls "access models," and that referred to companies such as Spotify, YouTube and Rdio. The services they operate generate revenue by providing access to music or music videos and then sell subscription plans, advertisements, or both. Apple and Amazon typically sell individual songs or albums. This is the first year that the RIAA has reported revenue from ad-supported services such as YouTube and Vevo.
The RIAA has tossed most of these access models into a single bucket so it's nearly impossible to determine what kind of money each sector or company is generating. The most interesting info the RIAA provides about these access models is that they make up 15 percent of the industry's total revenue, up from three percent in 2007. The difference between the RIAA's report and all the other annual reports you've read about lately is that these deal with hard sales numbers in the United States, as opposed to worldwide sales figures.