The Recording Industry Association of America has reported its revenue numbers for the first half of 2014. The RIAA says strong growth in revenues from streaming services offset declines in digital downloads, but overall revenues were down 2.5%, to $2.2 billion at wholesale value and down 4.9% to $3.2 billion at retail. Streaming music services grew 28% in the first half of 2014 to $859 million, versus $673 million for 1H 2013. This category includes revenues from subscription services (such as Rhapsody and paid versions of Spotify), streaming radio service revenues that are distributed by SoundExchange (like Pandora, SiriusXM, and other Internet radio), and other nonsubscription on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify). These streaming services contributed 27% of total industry revenues in 1H 2014, compared with 20% for 1H 2013. The growth in revenues from streaming services offset the entire decline in revenues from permanent downloads for the first half of 2014.
Paid subscriptions grew to $371 million, up 23%, but grew at an even more rapid pace of 43% by number of subscriptions. This difference is partially due to an update in RIAA?s retail price markup estimate. On-demand ad-supported streaming services grew 57% y-o-y to $165 million for the first half of 2014, and SoundExchange distributions grew 21% to $323 million. Combined, those two categories accounted for 57% of total streaming revenues for 1H 2014. The total value of digitally distributed formats was $2.2 billion - virtually flat compared to the 1H of 2013. Digital accounted for 71% of the overall market by value, compared with 68% for 1H 2013.
Revenues from permanent digital downloads (including albums, single tracks, videos, and kiosk sales) declined 12% to $1.3 billion for the first half of 2014. There were 54.3 million digital albums sold, down 11% versus 61.3 million in 1H 2013. Total value of digital albums was $544 million, down 14% versus the same period the prior year. Digital track sales volume was down 9% to 644 million, and the total sales value of tracks was down 11% to $753 million. Total sales in physical formats were $898 million, down 14% versus 1H 2013. CDs made up 80% of total hysical shipments, and vinyl ? which was up 43% by value for the first half of the year ? accounted for 16% of the total by value.
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