When was the last time you bought a CD? Those flat doughnut-shaped invention is making a surprising return as sales grew for the first time in 17 years.
As the world becomes ever more digital, you expect music CD sales to decline steadily. That had been true until last year when the reverse actually happened. According to the Recording Industry Association of America, RIAA, even though streaming is getting more popular, CD sales grew by 21 percent. The year ended with $584 million worth of sales, marking the first time since 2004 that there was no year-on-year decline.
“For the first time since 1996, both CDs and vinyl records experienced revenue growth in the same year. The resurgence in vinyl records continued for the 15th consecutive year, as revenues grew 61% to $1.0 billion in 2021. The last time vinyl records exceeded $1 billion was 1986. Vinyl accounted for 63% of revenues from physical formats, and 7% of total music revenues. Revenues from CDs rebounded from 2020, when Covid-19 significantly impacted retail as many stores were closed and tours were suspended or canceled. In 2021, revenues from CDs grew 21% to $584 million, the first year-over-year increase in CD revenues since 2004.”
The music association noted that many physical record stores opened back during the year, following a Covid ravaged 2020. Also, performing artists resumed selling records at shows as venues began to reopen.
However, vinyl has not suffered the same fate as the CD. Following a decline that began in the eighties, the larger disc increased sales while CDs tanked. But vinyl, too, had a massive year in 2021, recording a jump of 61 percent in revenue to bring in a total of $1 billion. All physical music sales came to $1.66 billion in the US for the year.
Meanwhile, digital music downloads declined in sales in 2021, the only major recording format that failed to see growth. The format lost 12 percent, with sales totaling $587 million. This was only $3 million more than what CDs pulled in.
Unexpectedly, nothing came close to streaming. Revenues grew by almost 24 percent to end at $12.4 billion last year. Paid subscriptions took the lion’s share, at $9.5 billion, increasing 23 percent from the previous year. The number of subscribers grew by 11 percent, to 84 million, although the figure varies throughout the year as users sign up or cancel subscriptions. Also, the RIAA counted multi-user plans as a single subscription.
Streaming accounted for 83 percent of all revenue in the music industry, showing why artists should take it seriously, despite fighting to earn more share of streaming revenue. The RIAA got data from platforms like YouTube, Spotify, Facebook, TikTok, etc.
It is not clear if the music industry can sustain the return of the CD music format, but, interestingly, artists may once again look at it as a bona fide source of revenue. However, it brings back memories of a not-too-distant past and means music stores can stay in business, at least for a little longer.
To summarize, the RIAA wrote, “In 2021, recorded music revenues in the United States grew 23% to $15.0 billion at estimated retail value. All major formats of music grew versus the prior year, with the exception of digital downloads. Paid subscriptions continued to be the biggest growth driver, resulting in the sixth consecutive year of growth for music revenues. At wholesale value, 2021 revenues were up 22% to $9.8 billion. On a nominal basis, these revenue levels exceed the record high of $14.6 billion reported in 1999, but adjusted for inflation 2021 figures remain 37% below that value level.”