2024 Music Industry Overview
2024 is unlikely to become a famous year in the history of the recorded US musical industry.
New Riaa statistics issued earlier today (March 18) showed that the annual wholesale income in the United States, which includes income paid to labels, distributors, and artists, grew by an insignificant 2.7% year last year.
This figure was below the annual inflation level in the USA in 2024, which stood at around 3%.
Thus, it can be argued that the US industry is not actually “growing” at all.
Spotify’s Role in Industry Performance
So who is to blame for this disappointing performance?
Well, it’s not Spotify.
After the RIAA numbers were published, MBW reached out to Spotify HQ to ask how the new figures are calculated from Daniel Ek‘s perspective.
A Spotify press secretary confirmed that in 2024, its annual recorded musical payments in the United States “experienced double-digit percentage growth.”
This reveals several insights.
Firstly, Spotify gained market share in the USA last year.
According to RIAA numbers, overall income from music streaming in the United States in 2024, which includes advertising revenue and various subscription services, was only 3.7% year.
Spotify has now confirmed that the annual royalties payment has increased above this—somewhere over 10% on an annual basis.
Even if you look solely at ‘premium on-demand’ services in the table above, you will see that income from these paid platforms increased by 5.3% year in 2024.
Once again, Spotify’s general wholesale payment in the United States for the same year rose above this, reaching double-digit growth.
According to Spotify’s fiscal results for the fourth quarter, the company ended 2024 with 263 million paid subscribers worldwide.
Spotify informed investors that approximately 26% of these global subscribers were based in North America (USA plus Canada).
This implies that Spotify has roughly 68 million subscribers in North America as of December 31 (see below).
RIAA reported today that there were 100 million subscribers in the United States by 2024.
Market Challenges for Competitors
So if streaming slowdown in the United States is not stemming from Spotify, where does it originate?
Behind the scenes, leading industry figures have expressed significant disappointment in the growth statistics for Apple Music and Amazon Music in 2024.
Last year, during a call with Universal Music Group in Q2, EVP Michael Nash publicly addressed some mixed streaming subscription numbers for UMG in that quarter.
Without naming Apple or Amazon, Nash particularly praised the growth of global competitors Spotify and YouTube Music.
“While Spotify, YouTube, and many regional and local platforms continue to show healthy subscriber growth, other major partners have struggled with global adoption, resulting in a slowdown in new subscriber additions.”
Michael Nash, Universal Music Group, speaking in July 2024
Nash added, “(One) factor affecting the growth of subscription revenue in this quarter is the slowdown in subscriber growth on certain platforms, despite the general subscription market showing significant growth worldwide.”
“While Spotify, YouTube, and many regional and local platforms continue to show healthy subscriber growth, other major partners have struggled with global adoption, resulting in a slowdown in new subscriber additions.”
Nash continued: “We are engaged in in-depth discussions with all of our key partners regarding product innovations aimed at capturing high-value customers and stimulating future revenue growth.”
Spotify raised prices in the United States last summer, increasing its flagship individual premium tier to $11.99 per month, which helped boost annual payments for recorded music rights.
The company projects it will reach 265 million paid subscribers worldwide by the end of the first quarter of 2025, with quarterly revenue of €4.2 billion and operating profit of €548 million.
US music trade revenue growth slumped last year… but don’t blame Spotify.
