The American recorded music business grew in 2017, for the second consecutive year, as music fans continued to subscribe to streaming services, which counted more than 35 million U.S. subscriptions and drove a 16.5% increase in retail sales to $8.7 billion.

According to data released by the Recording Industry Association of America (RIAA), music is a digital business, with more than 80% of overall revenue stemming from an array of digital platforms and services.

In 2017, streaming music services delivered $5.7 billion in revenue - almost 2/3rd of total U.S. music industry revenues in 2017, and contributed nearly all of the growth. The streaming category includes
revenues from premium subscription services, streaming radio services including those revenues distributed by SoundExchange (like Pandora, SiriusXM, and other Internet radio), and ad-supported on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify).

Paid music subscriptions (services like Spotify, Amazon, Tidal,
AppleMusic, Pandora and others) generated the lion's share of that amount ? surpassing $4 billion for the first time ? and now represent the largest recorded music format by value. New services like Pandora Premium, iHeartRadio All Access, and the first full year of Amazon Unlimited added to a growing group of offerings along with established services like Apple Music, Spotify, Tidal, and others. Note the number
of subscriptions does not include limited tier services.

Revenues from digital downloads fell 25%, to $1.3 billion in 2017. For the first time since 2011, revenues from physical products exceeded those from digital downloads. Revenues from sales of track downloads were down 25%, and digital album revenue decreased 24% versus 2016.
The total value of digitally distributed formats in 2017 was $7.0 billion, up 22% from the prior year.

Finally, shipments of physical products decreased just 4% to $1.5 billion in 2017, a lower rate of decline than in recent years. In the first half of the year, the rate of return of physical goods declined, leading to better results. In the second half, those rates returned to more typical levels.

Vinyl continues to be a bright spot among physical formats, with revenues up 10% to $395 million. Shipments of CDs continued to decline, falling 6% in 2017 to $1.1 billion. Revenues from shipments of physical products made up 17% of the industry total in 2017.