July 20, 2020
At the centre of entertainment globally, The USA is the largest music market in the world. The country is home to many of the biggest artists in the world. Across both IFPI and CISAC’s annual reports, the USA tops the charts for revenue income. The RIAA released figures of $11.1 billion in total music revenues for 2019, of which 80% came from streaming (RIAA, 2020).
In MusicAlly’s country report, The RIAA shared that in 2019 music streaming revenues grew by 19.9% to $8.8 billion, achieving a figure larger than the whole recorded music market just two years prior. This growth is reflected by the number of on-demand streams which surpassed one trillion for the first time. However, this report also noted that while these numbers are favourable the year on year revenue growth has slowed. This perhaps shows a maturity in the market. In 2017 streaming revenues grew by 43% while in 2019 growth was under half that. Despite this it should be noted that this still represents consecutive double-digit growth. (Music Ally, 2020)
Paid subscription growth has been significant in the USA. In their 2020 USA report, MusicAlly shared that there are “incredibly strong music subscription numbers” (Music Ally, 2020). In 2019, paid subscriptions accounted for 61% of total music revenues (Billboard, 2020). In 2019 it stood at 60.4 million in paid subscription revenues up from 46.9 million in the previous year. When discussing when paid subscriptions may reach its peak, experts were uncertain with A2IM president and CEO Dr Richard James Burgess sharing that “there are too many factors to parse” to be able to confidently predict a ceiling for subscriber numbers” (Music Ally, 2020. As for user demographics streaming is pretty even across genders. Streaming is popular across all age demographics, but the largest group of paid music subscribers are those aged 25-34 years old, accounting for 28% of all paid subscriptions (RIAA, 2020).
Of people’s choice of paid music streaming subscriptions, both streaming platforms and digital radio stations are popular. However, in contrast to many of our other Global Music Market Focus articles, Apple Music is the streaming platform used by most people in the USA. Spotify held the top position until 2017 when Apple Music overtook them. Analytics company Verto shared data about music streaming platforms. In this 2018 index, Apple Music had 49.5 million monthly users in comparison to Spotify’s 47.7 million monthly users. When discussing devices, 99% of the Apple Music users did so on their phone. With Apple being the most popular smartphone brand in the USA, with a 49% market share in Q4 of 2019, this is sure to be a factor into this statistic. In contrast, to consume music on Spotify, 55% of US users did so on a PC (Vertuo, 2018).
Verto dug deeper into their music streaming data to produce a Music Lover report, highlighting the behaviours of the top 20% of music streamers. This was defined by those who spent the most time on music streaming platforms during the month. In contrast to overall popularity figures, Spotify came out on top for the Music Lovers group. For this category, 15.2 million Music Lovers use Spotify versus just 12 million for Apple Music. Also for Music Lovers, Pandora is a highly important platform with 13.8 million of the music lovers choosing it to stream music. Pandora does not rate so high outside the USA (Vertuo, 2018).
Looking at Forbes highest earning artist list for 2019, 7 out of the top 10 were artists from the USA. Amassing a combined wealth of over $735.5 million in 2019, the group contained artists such as Taylor Swift, The Eagles and Beyoncé (Forbes, 2019). For independent artists, a platform of note which was popular is SoundCloud with 34.2m users. This platform is known as an excellent platform for music discovery with up and coming artists using it to distribute music. As a result, many recent artists gained fame from it and transitioned into mainstream chart success. US artists such as Post Malone, Lil Nas X and Kehlani launched their careers on SoundCloud and have all gone on to join record labels, rise in the global charts and launch successful albums (Soundcloud, 2017). The popularity of social media and music sharing has helped these artists transition from self-distribution to mainstream music. The story which stands in infamy is Lil Nas X who achieved number 1 on the charts from a song he created and launched originally on SoundCloud, driven in popularity by social media users (Rolling Stone, 2019).
It was noted in the MusicAlly Country report that while technology is growing overall revenues and giving artists a platform, the revenue is not always distributed fairly to the artists. The report highlighted that artists need to be fairly compensated and called on technology platforms to help prevent piracy. There is also the issue of minute royalty payments per stream from music platforms. One example shared was TikTok which increased the consumption of record music, but has not paid creators fair royalties (Music Ally, 2020).
However, there have been significant moves towards fairness for artists such as the introduction of the Music Modernization Act in 2018 and the subsequent establishment of a Mechanical Licensing Collective (MLC) to manage the mechanical royalties associated with digital service providers. Fair music royalties for artists is high on the agenda of local music rights organisations such as ASCAP and BMI (CISAC, 2019).
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