What just happened? With cinemas showing Dune and, soon, Beetlejuice, and the world in a tense standoff with Russia, it sometimes feels like we're back in the 1980s. Another phenomenon reminiscent of the decade – at least the early- to mid-parts – is vinyl being more popular than CDs. The big black records outsold the smaller, shinier discs in 2023 for the second year in a row, with sales reaching 43 million.
Those vinyl sales mean the format outsold CDs by 6 million units, according to the Recording Industry Association of America. The more expensive vinyl also made a lot more money than CDs: $1.4 billion compared to $537 million. And while CD revenue was up 11.3% YoY, the 37 million units shipped represent a decline of 600,000 compared to the previous year.
This marks only the second time since 1987 that vinyl has outsold CDs – the same thing happened last year. 2023 also marked the 17th consecutive year of vinyl growth and a 10% YoY revenue increase.
Records accounted for 71% of all physical-format revenue last year; there were also around 500,000 cassettes sold, surprisingly. Overall, physical music revenue hit $1.91 billion in 2023, up 11% compared to 2022.
Digital is, of course, still king, representing 89% of total shipments last year. Paid subscriptions, ad-supported services, digital and customized radio, social media platforms, apps and others grew 8% to a record high $14.4 billion in revenue. These services made up 84% of all sales as paid subscriptions to on-demand services such as Spotify and Apple Music reached an all-time high of 96.8 million. Revenue from these subs increased to $11.2 billion in 2023, accounting for 78% of all streaming revenue and nearly two-thirds of total revenue.
One digital area that continued to decline last year was revenue from downloaded music, falling 12% to $434 million. Downloads accounted for just 3% of U.S. recorded music revenue in 2023, down from a peak of 43% of revenue in 2012, highlighting how most people prefer to stream their music these days.
The recorded music industry as a whole saw revenue grow 8% in 2023 to reach an all-time high of $17.1 billion. While it was the eighth consecutive year of growth, there are fears that the streaming boom is leveling off. Like so many industries, the music world is dealing with mass layoffs and the threat of generative AI taking jobs. There's also the concern that the technology could stifle artists.