In 2017 revenues from recorded music in the U.S. increased 16.5% at an estimated retail value to $8.7 billion, continuing the growth from the previous year. These increases came primarily from growth in paid music subscriptions to services like Apple Music, Spotify, Amazon, Tidal, Pandora and others, which grew by more than 50%, according to the Recording Industry Association of America (RIAA), the trade organization that supports and promotes the creative and financial vitality of the major music companies.
This is the first time since 1999 that U.S. music revenues grew materially for two years in a row. At $8.7 billion, the industry has taken a decade to return to the same overall revenue level as 2008, and is still 40% below peak levels as the growth from streaming has been offset by continued declines in revenues from both physical and digital unit based sales.
Total revenues from streaming platforms were up 43% to $5.7 billion, and in 2017 made up 65% of total industry revenues, according to the RIAA. Paid subscriptions were the biggest growth driver for the music industry in 2017. Year-over-year revenue growth
of 63% brought total subscription revenues to more than $4 billion for the first time, making it by far the biggest format of recorded music in the U.S., comprising 47% of the total market.
Subscription growth was driven by continued rapid user adoption, as the number of paid subscriptions to full on- demand services grew 56% to average 35.3 million for the year, compared with 22.7 million in 2016. New services like Pandora Premium, iHeartRadio All Access, and the rst full year of Amazon Unlimited added to a growing group of offerings along with established services like Apple Music, Spotify, Tidal, and others.
Revenues from digital downloads fell 25%, to $1.3 billion in 2017. For the first time since 2011, revenues from physical products exceeded those from digital downloads. Revenues from sales of track downloads were down 25%, and digital album revenue decreased 24% versus 2016.
The total value of digitally distributed formats in 2017 was $7.0 billion, up 22% from the prior year, and contributed 82% of total industry value (note this calculation excludes Synchronization revenues).