Newsletter
vinyl record crate in the store close up

CDs and Vinyl Once Again See Stronger Sales than Digital Downloads

by -

For the first time since 2011, CDs and vinyl have outsold digital downloads in music.

That said, the big winner in the current music industry is by far limited streaming services.

Music Industry Shifts

Streaming music has taken the recording industry by storm. If it wasn’t evident through its own growing sales figures, there are new trends supporting the claim. Among them are that digital downloads have seen plummeting growth, far faster than CDs and vinyl. In fact, this has occurred to such an extent that CDs and vinyl are once again outselling digital downloads.

The last time that had occurred was in 2011, when it was the growth of CDs and vinyl that was falling and digital downloads were taking off. MP3 players such as the iPod were coming into their own at that time, removing the need to purchase physical copies of albums.

Digital Downloads Fell to $1.3 Billion

Digital download revenues dropped to $1.3 billion in 2017. That said, CDs and vinyl fell, too, but only to $1.5 billion, said the RIAA’s recently released year-end report for last year. At the same time, streaming service revenues took off. In 2016, the recording industry was already making over half its revenues from streaming.

That was the first year in which that threshold was crossed. That said, the growth only continued into 2017. By that year, nearly two thirds of the music industry’s revenue – around $5.7 billion – came from streaming services. That represented a growth of 43 percent over the year before.

Limited Tier Paid Subscription Streaming

Subscription streaming services have reached astounding popularity levels. Among the top players include Apple Music and Spotify.

That said, there is a category of streaming service that has been growing extremely fast and that may become exceptionally important to the recording industry in the near future. These are limited tier paid subscriptions.

They are a form of streaming subscription with various types of considerable limitations applied. For instance, Amazon sells unlimited music streaming for $4 per month that will work only on one Echo device. The Pandora Plus paid radio service is also a limited tier paid subscription.

While the industry hasn’t paid much attention to this category as of yet, it has already grown to 14 percent of last year’s subscription market from having been 11 percent the year before. In terms of revenue growth, it rose by 125 percent year over year, making it much more clear why this is a category not to be ignored.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.