2024 will hardly go down as a banner year in the history of the US recorded music industry.
New RIAA stats issued earlier today (March 18), showed that annual wholesale revenues in United States – that’s the revenues paid through to labels, distributors, and artists – grew by a paltry 2.7% YoY last year.
That figure was lower than the annual inflation rate in the US in 2024, which stood at around 3%.
As such, one can argue the US industry didn’t actually ‘grow’ at all.
So who’s to blame for this disappointing performance?
Well, it ain’t Spotify.
In the wake of the RIAA numbers being published, MBW checked in with Spotify HQ to ask how the new figures tallied with how Daniel Ek‘s company sees the world.
A Spotify spokesperson confirmed that in 2024, its annual recorded music royalty payouts in the United States “experienced double-digit percentage growth”.
This tells us a few things.
Firstly, Spotify gained market share in the US last year.
According to the RIAA’s figures, overall on-demand music streaming revenues in the US in 2024 – across ad-supported plus various types of subscription services – were up by just 3.7% YoY (see below).
Spotify has now confirmed that its annual recorded music royalty payouts increased by way above the market – by somewhere in excess of 10% year-on-year.
Even if you only look at ‘Premium On-Demand’ services in the table above, you’ll see that, according to the RIAA, revenues from these paid-for platforms grew by 5.3% YoY in 2024.
Again, Spotify’s overall wholesale payout figure for the US in the same year soars way above this – into the double-digits.
According to Spotify’s Q4 fiscal results, the firm ended 2024 with 263 million users of paid subscription accounts globally.
Spotify has told investors that approximately 26% of these global subscribers were based in North America (the US plus Canada).
From that, we can imply that Spotify counted somewhere in the ballpark of 68 million subs in NA as of December 31 (see below).
The RIAA reported today that there were 100 million subscribers in the United States as of the end of 2024.
So if the streaming revenue slowdown in the United States isn’t coming from Spotify, where is it coming from?
Behind the scenes, leading industry figures have pointed to particular disappointment over Apple Music and Amazon Music‘s growth statistics in 2024.
On Universal Music Group‘s Q2 earnings call last year, the firm’s EVP, Michael Nash, publicly responded to some lumpy streaming subscription numbers at UMG in the quarter.
Without naming either Apple or Amazon, Nash notably praised the growth trajectory of global rivals Spotify and YouTube Music.
“While Spotify, YouTube and many regional and local platforms have continued to exhibit healthy growth in subscribers, other large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions.”
Michael Nash, Universal Music Group, speaking in July 2024
Said Nash: “[One] factor impacting our subscription revenue growth this quarter is the slowdown in subscriber growth at certain platforms, which is occurring while the overall subscription marketplace continues to experience significant growth in subscribers globally.
“While Spotify, YouTube and many regional and local platforms have continued to exhibit healthy growth in subscribers, other large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions.”
Nash added: “We are engaged with all our key partners in an in-depth dialogue regarding product innovation to target high-value customers and drive future revenue growth.”
Spotify increased its pricing in the US last summer – pushing its flagship individual Premium tier to USD $11.99 per month – which helped drive its double-digit increase in annual payouts to recorded music rightsholders.
The company is forecasting that it will hit 265 million paying subscribers globally by the close of Q1 2025, with quarterly revenues of EUR €4.2 billion and an operating profit of EUR €548 million.Music ComeOn