Vinyl albums outsold CDs in 2022 for the first time since 1987, marking the 16th consecutive year of growth in vinyl. Streaming remains the main driver of the music industry’s growth, but physical music formats experienced a resurgence in recent years. Vinyl revenue reached $1.2 billion, accounting for the majority of physical music revenue, while CD revenue declined. The pandemic contributed to the increased demand for vinyl, especially among younger buyers. However, the growth in vinyl sales has also caused challenges for independent manufacturers and small artists. Despite the decline in CD sales, the recorded-music industry’s fortunes have improved with the rise of streaming services.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Vinyl records outsell CDs | Shift from CDs to vinyl records | Vinyl records continue to outsell CDs | Increased demand for physical music formats |
| Streaming is still the biggest driver | Shift from physical formats to streaming | Streaming continues to dominate music industry growth | Convenience and accessibility of streaming services |
| Pandemic led to spike in vinyl demand | Increased demand for vinyl records | Vinyl records remain popular, especially among younger buyers | Nostalgia and desire for tangible music formats |
| Vinyl has become part of artists’ marketing | Vinyl records used as marketing tool | More artists using vinyl as part of promotional campaigns | Nostalgia marketing and unique physical merchandise |
| Streaming services brought in $10.2 billion | Shift from physical sales to streaming revenue | Streaming services continue to generate significant revenue | Subscription-based streaming services and ad-supported platforms |
| Digital downloads revenue dropped 20% | Shift from downloads to streaming revenue | Digital downloads continue to decline in popularity | Preference for streaming over purchasing individual tracks. |