Even though I wrote the above headline, I still can’t quite believe it. But according to the Recording Industry Association of America’s number-crunching of music sales in 2018, this is how things could play out over the coming months.
American CD sales collapsed by 34% to US$698 million while vinyl sales ticked up by 8% to US$419 million. If the trend continues–and there’s no reason to think it won’t–revenues from vinyl could surpass that of CDs before we hit 2020.
The last time vinyl outsold CDs? At least 1986.
Actually, the vinyl market is undoubtedly already bigger than CDs if you take into account the trade in used vinyl at record shops and online. And don’t forget that many independent shops that sell new vinyl don’t report to SoundScan, the official counter of all music sold.
The reason for the slow death of the CD? Streaming, of course. There were 1.2 trillion streams in America last year, accounting for 75% of all music sales revenue. Compare that to physical formats (CDs, vinyl) at 12% and digital downloads at 11%.
A little over 50 million Americans are paying subscribers to services like Spotify and Apple Music with an average of one million new subscribers coming online every month.
There’s no question that streaming is best for day-to-day consumption of music. It provides everything you want–the last number i heard was that the celestial jukebox contains in excess of 50 million songs–at little (or even no) cost. That’s a far, far better deal than CDs can ever offer.
But sometimes you want to own something, to create a carefully curated library of music that you can return to again and again and again at no additional cost. For whatever reason, the format of choice for ownership increasingly is vinyl and everything that goes with it.
But what about paid digital downloads, you say? Revenue has dropped below US$1 billion, with most of that (~70%, we think) going to iTunes.
So it’s all great for streaming, right? Not necessarily. The rate at which the platforms are picking up new subscribers is slowing. In other words, “peak streaming” might well be within sight. If that’s the case, we should probably start talking about what the music industry’s next move will be.