Vinyl outpaces CDs. A decade ago, this news would have seemed unimaginable, yet here we are: Vinyl record sales are on track to surpass CD sales in the near future. Even more astonishingly, the music industry has outpaced the film sector, emerging as the leading revenue generator.
This insight comes from a recent report by Pivotal Economics, penned by Will Page, the former chief economist at Spotify, who has been monitoring the music business’s financial landscape for the past ten years.
Page’s research vividly illustrates the resurgence of vinyl. His data suggests that in the United States alone, vinyl sales are set to generate an incredible $1 billion for record labels by 2024. This indicates that vinyl revenue will soon overshadow that of CDs, a trend likely to occur globally.
Unit sales of vinyl have already overtaken CDs. The Recording Industry Association of America reports that 43 million vinyl records were sold in 2023, exceeding CD sales by 6 million in the same year. This marks the second occurrence of such a shift since 1987.
Until now, vinyl sales faced challenges due to supply limitations. However, this situation is rapidly changing, as the report points to the involvement of significant European manufacturers like Record Industry (Netherlands), GZ (Czech Republic), and Pressing Business (Poland) in the vinyl production landscape. Their enhanced production capabilities and improved international shipping processes are alleviating these bottlenecks.
Nonetheless, the revival of vinyl is merely a segment of the broader revival within the music industry. Page’s analysis reveals that the value of music copyrights and performing rights – royalties derived from record sales, streaming, radio broadcasts, and live shows – has nearly doubled from $25 billion in 2014 to an impressive $45.5 billion today.
In contrast, the film industry, which once reigned supreme in the entertainment domain, has experienced a decline, with global box office earnings dropping from their 2019 peak of $41.9 billion to $33.2 billion.
The report also underscores the ascendance of streaming, which has, predictably, become the predominant revenue source, surpassing radio and other broadcasting formats. This marks a significant shift from a decade ago when traditional radio represented over 50% of music income, while streaming accounted for only 5%.
Furthermore, live music performances have now surpassed public performance licensing (the payments made by businesses to play music) as a leading source of revenue.
Image credit: Pivotal Economics
