Vinyl sales beat streaming revenues in 2015
In a major market twist, a recent report suggests that vinyl sales in the US generated more revenue in 2015 than free tier advertising from even the largest streaming services.
According to the RIAA’s year end revenue reports, vinyl sales rose 32% in 2015 with the highest gross sales since 1988 at $416 million. Ad supported streaming services accounted for only $385 million of the industry’s estimated $7 billion overall revenue.
The report also featured candid remarks from RIAA CEO Cary Sherman on the “value grab” tactics used by YouTube and other free streaming platforms who cash in on ad revenue without paying royalties to artists. “We feel that some technology giants have been enriching themselves at the expense of people who actually create the music,” Sherman said in the report.
These remarks have come under fire since the report was released earlier this week and critics have vocally accused the RIAA of failing to honestly equate sales figures across platforms.
The vinyl figures tracked by the RIAA, for example, are based on full retail pricing and fail to take into account kickbacks to retailers, production costs, and even discounts. The figures provided for the streaming formats, however, are based on wholesale profit values. The report also fails to fairly incorporate paid subscription services like the upper tiers of Spotify, Apple Music, Tidal, or Google Play and doesn’t touch on radio services like Pandora.
While Sherman insists the numbers reveal “market distortions at work,” the parameters of the report face similar scrutiny. In fact, U.S. revenues which include all forms of streaming, show growth of 29% to $2.4 billion in 2015.