The music industry can barely believe its luck. Revenue has risen—by quite a lot—for two years in a row now, after nosediving for two decades prior.
According to a new report yesterday (March 22) from the trade group the Recording Industry Association of America, US music revenue soared 17% from 2016 to 2017, to a total of $8.7 billion. Music-streaming platforms like Apple Music and Spotify have led that upswing, driving two-thirds of all revenue last year. Paid subscriptions alone rose 63%, comprising by far the largest chunk of the market, per the report (pdf). Last year marked the first time the industry saw double-digit growth in 20 years, and judging by this year’s report, the numbers for 2018 look decent, too.
But let’s take a step back: All of that fantastic surge only takes the music industry to the level it was at in 2008. At the industry’s peak, in 1999, revenue was $14.5 billion—nearly twice what it is now.
What happened? Physical sales of albums, which draw in more money than digital downloads and much more money than ephemeral digital streams, plunged. The iTunes store arrived, then Spotify, then a horde of other music-streaming services that have simultaneously increased user accessibility and decreased per-unit profit. (A monthly fee of $9.99 is a more-than-fair price to pay for an on-demand buffet of tens of thousands of songs; that also means that everybody making those songs gets paid significantly less.)
Still, a second year of consistent growth is nothing to scoff at, especially at the present moment. Music-streaming industry leader Spotify—which has not even been able to turn a profit yet, thanks to the aforementioned cheapness of its rates—is going public in a matter of days, and its market debut is being eagerly watched by the music business, as well as Silicon Valley investors and music fans. If Spotify’s IPO is a success, it could presage a new era of interest in investing in music. And if the IPO stumbles, it would be a bitter turn for an industry that is only just finding its footing again.