If you’re wondering why Amazon went so crazy today with new speaker-related announcements, even introducing Echo audio accessories without microphones, a new report from the Recording Industry Association of America explains it: Even in a post-iPod world, the market for digital music has never been stronger.
According to the RIAA’s Mid-Year 2018 Music Revenues Report, first-half revenues were up 10 percent to $4.6 billion retail or $3.1 billion wholesale, a healthy year-over-year gain. Moreover, a full 75 percent of all those revenues came from streaming music. The $3.446 billion haul at retail included subscription-based music service revenues, Internet/digital radio services, and ad-supported services. Collectively, these services generated the “overwhelming majority” of the industry’s revenue growth, the RIAA says, with paid subscription services taking the lead.
By comparison, only 12 percent of revenues — $562.2 million — came from digital downloads, a figure that’s been declining in both percentages and real dollars for years. But that’s still better than physical music sales, which now constitute a meager 10 percent of revenues, or $461.6 million during the half-year period.
Though billions of dollars in revenue might look great to listeners, the RIAA points out that the marketplace has been flooded with new content: Over 70,000 new albums were released in the first half of the year alone, challenging musicians to win over audiences inundated by numerous types of smartphone content.
Given the trends and dollars at stake, it’s clear why Amazon is making an even bigger play to compete with Spotify and Apple: Music streaming services are increasing at an average of over 1 million paid subscriptions per month, not including limited tier subscriptions. That’s why you’re seeing not only frequent refreshes to smart speakers such as the Echo Dot, Echo Plus, and Echo Show, but also expansions to turn traditional speakers into streaming or smart devices, like today’s Echo Link, Echo Link Amp, and Echo Input releases.
If the trends continue, actually owning music in either physical or digital form will soon seem antiquated to an entire generation — in its place, access to 50 million song collections, wherever you may be, for a low monthly fee.