Paid Music Streaming Hits Milestone

In 2024, the U.S. recorded music industry achieved a significant milestone: paid streaming subscriptions surpassed 100 million for the first time. This landmark, highlighted in the Recording Industry Association of America (RIAA) 2024 year-end report, underscores streaming’s dominant role in driving music revenue, accounting for nearly two-thirds of the industry’s total earnings. However, alongside this achievement, the industry saw a notable slowdown in revenue growth, signaling a maturing market.

Total U.S. recorded music revenue reached a record high of $17.7 billion in 2024, up 3% from the previous year, marking the ninth consecutive year of growth. Streaming led the charge, contributing $14.9 billion—or 84% of the total—with paid subscriptions generating $11.7 billion of that figure, a 5% increase from 2023. This growth in subscriptions, while impressive, reflects a cooling trend: the number of paid subscribers rose by just 3 million (from 97 million to over 100 million), a slower pace compared to prior years when annual increases often hit double digits.

The slowdown isn’t entirely unexpected. After years of rapid expansion fueled by the rise of platforms like Spotify, Apple Music, and YouTube, the U.S. streaming market is approaching saturation. With roughly 127 million households in the country, the current 100 million subscriptions suggest that most potential subscribers may already be tapped. This leveling-off has shifted industry focus toward retaining existing users and exploring new revenue streams, rather than relying solely on subscriber growth.

Meanwhile, the broader revenue picture shows mixed dynamics. Physical formats like vinyl continued a surprising resurgence, with sales climbing 7% to $1.4 billion—the highest since 1984—and outselling CDs (44 million units to 33 million) for the third straight year. Yet, digital downloads plummeted 18% to $336 million, now a mere 2% of the market. Ad-supported streaming, such as YouTube and Spotify’s free tier, saw a slight 2% dip to $1.8 billion, reflecting broader advertising challenges.

The RIAA frames this milestone as a triumph of innovation, with Chairman and CEO Mitch Glazier praising the industry’s ability to adapt and deliver value to fans. However, the modest 3% overall revenue growth—down from 7.7% in 2023—hints at challenges ahead. As streaming’s explosive growth phase wanes, the industry faces pressure to diversify income, whether through higher subscription prices, superfans, or expanded licensing deals. For now, hitting 100 million paid subscribers is a win, but the slowing pace suggests the next chapter of growth won’t come as easily.