When we all thought that the year of our Lord, Two Thousandth and Twenty, was finally done with surprises, new data has uncovered one more. Even with the beginning of the pandemic in March (a whole year ago, wow.) and all the crazy political stuff of the subsequent months, the music industry continued to grow.
The number one driver of this growth is obviously credited to streaming, which includes all on-demand platforms, ad-supported on-demand platforms, free services, and digital radio services. The revenue from all of these sources increased 13.4% in the plagued year, with streaming accounting for 83% of all recorded music revenue. The largest detriment of the pandemic on the music industry was, of course, live music and touring. While revenue from live music is not relevent to the growth of recorded music, live performances often lead to purchases of physical copies of recorded music. While streaming itself continued unphased by the lockdowns, recorded music was indirectly harmed by the absence of live music.
Streaming Vs. Downloads
An important relationship to highlight in this data is the change in digital downloads and album purchases.
“Revenues from digitally downloaded music were down 18% to $674 million in 2020. Permanent downloads of albums fell 13% by value to $320 million, and individual track sales were down 23% to $313 million in 2020. Downloads accounted for only 6% of total recorded music revenues in 2020.”
Ever since the advent of streaming, the value of both the album and digital downloads have been in jeopardy. Why pay $1.99 to listen to a single track when you can pay $14.99 to listen to a platform’s entire catalog? If you only like a single song in an album, why would you pay to own the whole thing? We no longer need to buy an artist’s album at a concert of store to hear his music.
In fact, most popular music is free to hear on YouTube! If you happen to really like one or two tracks, you can download just those two tracks or add just those two tracks to your Liked Songs Spotify playlist. As availability and selectivity of specific tracks have increased, and will continue to do so, the use and value of digital downloads and albums will further plummet.
Vinyl Gaining Ground
We are all aware of the decline of the compact disc. Some cars no longer have CD players, stores aren’t selling them as much, artists focus on merch at concerts, and so on. Who would have thought that, as CDs continued to fade, vinyl would actually outperform the CD in the year of lockdowns? For the first time in over thirty years, vinyl generated more revenue than CDs, growing by 28.7%.
While still only making up 5% of total recorded music revenue, this does solidify the fundamental value and pleasure of owning a physical copy of your favorite music in our increasingly digital world. Contrast this growth with the drastic decrease in digital ownership of tracks and albums. Personally, if I am going to purchase a specific song, show, or movie, I buy it physically rather than digitally. That way I know that, as long as I have a DVD or CD player, I can enjoy it, regardless of my internet connection or subscription status.
Recorded Music is Transcending the Physical
In a way, the digital revolution of the Twenty-First Century prepared recorded music for the pandemic. Without a prominent streaming culture, music would have ground to a halt in March and would have taken years to recover. Even though all the news during 2020 was bleak and downcast for live music, and rightly so, streaming kept going strong. And deep in the shadows, vinyl snuck ahead of CD in the physical sector.
This data helps us better predict where music is headed and reassures us that people still want to pay for music. While this all sounds like unfaultering praise for streaming platforms, we cannot forget that the artist can be overlooked in all this. Yes, streaming is king right now. But just because 83% of revenue was in the streaming sector, there is no way of knowing how much of that went to artists. Fortuantely, there are reasons to hope for the prosperity of the small, independent artist. SoundCloud has adopted a user-centric payment system inteded to get more money in the pockets of artists and MIDiA research shows that indie artists are growing faster than Spotify. Yet another example of how 2020 has more to teach us than hand washing.