CDs and vinyl are more popular than digital downloads once again

Photo by Matt Cardy/Getty Images

Streaming music is taking over the recording industry, and there’s no clearer sign of it than this: digital download sales have fallen so much in the past few years that they’re now smaller than sales of CDs, vinyl, and other physical media, which hasn’t been the case since 2011.

The stats, which come from the RIAA’s newly released 2017 year end report, show that digital downloads fell to $1.3 billion last year, whereas physical media, while also falling, only declined to $1.5 billion.

Of course, both pale in comparison to revenue brought in from streaming, which has taken over the music industry in recent years. In 2016, the music industry made more than half of its revenue from streaming for the first time, and that growth continued into 2017. Last year, nearly two-thirds of all revenue — over $5.7 billion — came from streaming, an increase of 43 percent.

Units show millions of subscribers.
Image: RIAA

That’s due to the increasing popularity of subscription services like Spotify and Apple Music. But as it turns out, there’s a fast growing new category of streaming services that could soon be a very big deal for the industry. They’re called “limited tier paid subscriptions,” and they’re basically subscription streaming services with some sort of major constraint. Amazon, for instance, sells a $4 per month unlimited music subscription that only works on a single Echo. Pandora’s paid radio service, Pandora Plus, also falls into this category.

Despite the lack of attention on this category, it represented 14 percent of the subscription market in 2017, up from 11 percent in 2016. That may sound tiny, but it represents a 125 percent year-over-year growth in terms of revenue, growing from $263 million to $592 million — bigger than vinyl. That’s huge for a segment that may well be growing largely due to the ballooning popularity of the Echo. Amazon’s streaming service didn’t go live until the end of 2016, so it’s likely responsible for a large part of that growth.

In a statement to The Verge, Amazon Music vice president Steve Boom said that the total hours of music streamed using Alexa-enabled devices has already doubled this year. “In the US, we’ve seen more than half of Amazon Music listeners used voice year to date, and compared to this period last year, we’ve already seen that the total hours streamed on Amazon Music via Alexa-enabled devices have doubled in the US. Amazon Music listeners love listening to music with Alexa,” Boom said.

Paid subscription revenue on its own was up 55 percent last year, and ad-supported streaming revenue was up 35 percent. Their continued growth has led to overall revenue growth for the music industry for the second year in a row, bringing it to $8.7 billion. That’s a return to 2008 levels, which is a bright sign for the industry, especially since subscription services show no sign of slowing. But as the RIAA notes, the industry’s revenue is still 40 percent below peak levels, and physical sales and digital downloads still have farther to fall.

Comments

CDs and vinyl are more popular than digital downloads once again

Interesting title POV. Definitely sounds more interesting than…"Streaming services continue to dominate as digital downloads & physical media sales continue to fall."

Took me awhile to understand headline. Still isn’t gonna save CD’s from Bestbuy pulling them from shelves!

me too… reminded me of Disco Stu

My first thought at the headline was, "Duh, because people are streaming instead of buying digital."

Somebody force Tool to put some music on Spotify. Pls.

I can’t find the latest Bollywood music on Spotify – so I buy them from iTunes.

Gee. If only there were a place where you could obtain that music yourself.

Like iTunes?

I love that youtube lets you listen to any track individually and pandora lets you listen to a genre all day for free. This is the route that I take for all my music needs.

I like streaming music but its always missing tracks on albums due to weird licensing issues and it makes it feel incomplete to me.

When I subscribed to the Apple Music trial it actually made me buy more CD’s as it highlighted the gaps in my collection.

I’m 35 and have been buying CD’s since I was kid in the 90’s so I’ve probably spent a few thousand and it would be wasteful to abandon all that now for a subscription service. However, if they plugged the gaps they have in the catalogue and upped the quality I’d be tempted.

Same. (35 and 90s kid) Curious what gaps you’re referring to unless you like hard to find artists in general, which I respect. I do pay for Apple Music and also maintain "my" music collection, which has grown and expanded as I’ve discovered things I missed over the years (via AM). I have probably spent too much on vinyl in the last couple of years, eek. I live in both worlds I guess. It’s a balance. I don’t think I could give up the subscription now though. It’s just too convenient. I do rip CDs and use the vinyl download codes when I buy something, that way iTunes knows that I own it and if I ever cancel the subscription it will still live in my digital collection.

My gaps have just been random albums that I seem to have missed for some reason like Reel Big Fish, Dispatch and I’ve also started getting into some classic rock so I’ve been buying ACDC, Kansas, Bad Company etc plus some others I probably shouldn’t admit to owning lol.

Thought I’d chip in, being 33 (near enough)

Have never streamed music other than YouTube, or radio over TuneIn.

Have probably 500 CDs in my collection, but just never listen to them any more I recently had to replace my car headunit and thought I’d opt for the CD version so I still had a means of playing them! But I just don’t bother (maybe one every couple of months) it’s a shame really.

As for my main music collection, it’s now purely mixes (I only listen to house/techno/dubstep really) about 800 mixes deep now! Which is a smidgen over 75Gb. That’s a lot of music I’ve obtained for free (legally)

Why would it be wasteful? Those CDs are a sunk cost.

It’s wasteful because he already owns a lot of that music and paying for a streaming service is like paying for something you already own, especially if you don’t venture into new releases. CDs are easily digitized and can be freely streamed to any device using something like Plex.

Thats correct, I don’t tend to listen to too much new music so I’d mainly be paying for stuff I already own. I might buy 3 – 4 new albums each year at most.

Or you could just use itunes

That and the quality of the CD is actually better than the lossy downloads from most internet stores and even more lossier streaming services. I hope CD’s continue to be made.

Vinyl sounds terrible.

The sound, especially the bass end, is very volume-limited.

Maybe get a good turntable, a proper amp and some good speakers?

Vinyl is restricted though in low-end response by the physical width of the groove (there is a limit that once crossed, the needle will jump from a very wide groove). What "they" did, was to print the bass on vynil at lower volume and re-amplify that lacking bass at the preamp stage (the famous RIAA curve).
However, I won’t say that vynil sounds "terrible" (indeed, DaveHat perhaps tried to listen vinyl through a wrong preamp so the RIAA curve was not compensated). Good masters, especially the ones on thick vinyl sound really good.

Yeah, you really need a quality preamp if you want to get good low-end out of a vinyl record. You also need good quality vinyl, a lot of stuff now is being pushed out without a lot of care taken to sound quality. Vinyl can sound really good though. I won’t claim it’s better than CD like some people, technically CD is superior in some ways, but subjectively vinyl can be more engaging for some music

My Yes records would disagree with you.

But don’t you see? Vinyl doesn’t have any bass; this is why no self-respecting DJ would use it.

Apparently.

(proceeds to demolish the place with a stack of 90s techno)

Pretty sure "DaveHat" has one of these:

View All Comments
Back to top ↑