The RIAA released its aggregated annual recorded music revenue numbers for the United States last month. They show that the industry has completed its transition to streaming — and more particularly, to interactive or on-demand streaming. Last year interactive streaming — a la Spotify, Apple Music, Google Play, Napster, Deezer, Tidal, etc. — turned in the majority (55%) of revenue to record labels and recording artists.
The 52% growth in interactive streaming from 2016 helped buoy the overall industry to total revenue of $8.8 billion, a healthy 17% increase. Meanwhile, revenue from downloads continued its steep decline, dropping 25% to $1.3 billion. Downloads are a distant second to interactive streaming in revenue, and they are on a trajectory to dip below CDs by the end of this year.
We are now in recorded music’s fifth era: the era of interactive streaming. RIAA revenue data shows that there were four eras, each of which featured a different dominant mode of recorded music delivery: vinyl, tape (8-track, then cassette), CDs, and digital downloads.
The five eras of recorded music (revenue, $millions). Source: RIAA.
The vinyl era began around the turn of the 20th century and dominated until 1983. Cassette tapes — playable in cars with good sound quality by then — took over in 1984. CDs shot past both cassettes and LPs in 1991. CDs brought in an unprecedented expansion of revenue and ruled until consumer Internet access started to proliferate in the late 1990s; their downturn began during the “Napster era” of 1999-2001. File downloads, mainly from iTunes, took over from CDs just before their peak in 2012; they dominated briefly from then to 2015.
Now interactive streaming is dominant, and from the looks of that classic “hockey stick” curve, we’re a long way from the peak there.
In fact, it looks like interactive streaming will become one of the most long-lived delivery modes of all time. Notice that the previous leading modes of delivery had been around for roughly a decade each before they became dominant; interactive streaming was available for over 14 years (Rhapsody had full major label licensing in 2002) before its turn at the top. Some other mode of music delivery will eventually supersede interactive streaming, but I’m not sure anyone knows what it is or if it even exists now.
Of course, revenue is only a weak proxy for popularity, and the RIAA revenue figures don’t show major sources of listening such as used physical record sales or unauthorized copying of digital files. But it can’t be denied that the interactive streaming era is here to stay for a while.
The other major point to glean from these numbers is that the download era was the shortest of them all. Commercial downloads — which Steve Jobs championed so vociferously in the previous decade — will probably turn out to be a forgettable blip in the long term, even less significant than the few years of cassette tape dominance in the 1980s that no one remembers.
As it turns out, downloads were never a great business for record labels. The brief era of download dominance corresponds almost exactly to the industry’s nadir period of 2010-2015, when revenues bottomed out around $7 billion, the lowest they had been (adjusted for inflation) since the 1960s. The industry gravitated to a more lucrative way to deliver music to people, one that had existed since 2002.
Here’s another indication that commercial downloads will turn out to be a short-lived, transitional phenomenon. For those of you who have seen my previous charts on the use of DRM in digital music delivery, here’s what happened when I expanded that chart to include 2017 and also expanded it backwards to the beginning of the commercial download era in 2004:
Percentage of recorded music revenue from encrypted vs. unencrypted delivery modalities, 2004-2017. Source: RIAA.
As this chart shows, not only was the era of commercial downloads a blip, but it also led to a blip of slowdown in the growth of the use of encryption in digital music delivery. The RIAA’s Chief Technology Officer David Hughes likes to say that commercial downloads are the only mode of digital music delivery without DRM*; now that downloads are shrinking in importance, the numbers show how right he is.
Growth of DRM usage tapered off in 2008, just as Amazon and Apple started selling DRM-free music downloads. But Spotify’s U.S. launch in 2011 reversed the trend. When streaming became the majority of the market in 2016, encryption became the rule rather than the exception. Far from ushering in an era of DRM-free music, it looks like the commercial download era has been a glitch in the overall long-term pattern of constant growth of encryption in digital music delivery. We should see that growth continue for a while yet.
*Some Internet radio streams are also delivered without encryption. I’m sure David knows this, but let’s not deny him the rhetorical truth of his statement.
Copyright and Technology 
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] torrents for file sharing. The clearest formulation on this subject comes within the article “The Fifth Period of Recorded Music” from Invoice […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] torrents for file sharing. The clearest formulation on this matter comes within the article “The Fifth Era of Recorded Music” from Invoice […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]
[…] of using torrents for file sharing. The clearest formulation on this topic comes in the article “The Fifth Era of Recorded Music” from Bill […]