`(In Millions, net after returns)
`Digital
`
`(Units Shipped)
`(DollarVaIue)
`
`.
`Download Single
`Download Album
`
`Total Units
`Total Value
`
`.t.
`s b
`” “"9 '°"
`
`3
`
`ammmc m
`4951):: 4mm
`
`M m
`
`2008 Year-End Shipment Statistics
`202-775-0101
`
`mum-
`138.0
`363.3
`580.6
`801.6
`
`45.5
`
`135.7
`
`275.9
`
`424.9
`
`
`
`
`
`----1 0 1 9 2.6
`
`
`----3 7. 28.2
`383 1
`868.4
`143 9
`625 3
`503 6
`1,257.2
`183.4
`878.0
`170.0
`362.0
`315.0
`421.6
`880.8
`773.8
`
`1.3
`149.2
`
`1.3
`206.2
`
`1.8
`201.3
`
`%CHANGE
`2006-2007
`
`38.1%
`
`54.0%
`
`38.1%
`
`43.0%
`38.9%
`43.2%
`14.9%
`13.8%
`
`42.8%
`-2.4%
`
`%CHANGE
`2007-2008
`27.5%
`27.6%
`33.9%
`33.9%
`-8.7%
`-1.2%
`46.7%
`46.7%
`28.1%
`30.1%
`-6.5%
`-7.3%
`
`-15.0%
`-6.5%
`
`1,022.7
`
`568.9
`
`2.6
`
`41.3
`
`338.4
`816.3
`
`1.6
`188.2
`
`Digital PerformanceRoyalties‘ 49-2%_
`
`744%
`
`Physical
`
`11,416.0
`
`12,816.3
`
`13,214.5
`
`12,909.4
`
`12,044.1
`
`11,232.9
`
`11446.5
`
`10,5202
`
`9,372.6
`
`7,452.3
`
`213.2
`
`222.4
`
`1,419.9
`
`1,061.6
`
`142.7
`
`626.0
`
`79.4
`
`19.6
`
`36.0
`
`14.982
`
`363.4
`
`209.8
`
`108.1
`
`23.7
`
`10.9
`
`13.1
`
`14.2
`
`7.7
`
`3.7
`
`15.7
`
`12.2
`
`3.0
`
`22.9
`
`197
`-54.7%
`
`34.0
`
`25.7
`
`31.8
`
`27.9
`
`27.7
`
`26.3
`
`508.0
`
`376.7
`
`281.9
`
`DVD V'de°
`
`12.2
`
`66.3
`
`80.3
`
`27.4
`
`31.4
`
`329.2
`
`190.7
`
`20.5
`
`24.9
`
`288.4
`
`236.3
`
`21.7
`
`21.5
`
`399.9
`
`369.6
`
`19.3
`
`19.9
`
`607.2
`
`561.0
`
`13.2
`
`602.2
`
`539.8
`
`9.9
`
`451.1
`
`442.8
`
`4.0
`
`484.9
`
`476.1
`
`-26.6%
`-20.5%
`5,471.3
`-71.3%
`59.0%
`3.5
`“7%
`51'5%-
`"m
`'41'2%-
`-70.7%
`-18.4%
`0.9
`147.7%
`46.2%
`56.7
`36'6%-124'1%
`'3°'9%
`-59.6%
`2.9
`-27.4%
`535%
`-54.9%
`-53.8%
`
`7.5%
`
`218.9
`
`194%-
`7.5%
`215.7
`
`TotalValue6
`
`13,711.2
`
`14,584.7
`
`14,323.7
`
`13,740.9
`
`12,614.2
`
`11,854.4
`
`12,154.7
`
`11,195.0
`
`9,868.6
`
`7,985.8
`
`-19.1%
`
`5,758.5
`
`-27.9%
`
`_--------- '16'°%--
`Total RetailValue
`13,048.0
`12,705.0
`12,388.8
`11,549.0
`11,053.4
`11,423.0
`10,477.5
`9,269.7
`7,495.3
`-19.1%
`5,474.3
`-27.0%
`
`Total Digital & Physical
`4.4%
`1,852.5
`11.7%
`1,774.3
`1,588.5
`1,301.8
`958.0
`798.4
`859.7
`968.5
`1,079.2
`1,160.6
`1,123.9
`Total Units7
`
`-18.2%
`8,480.2
`-11.8%
`10,372.1
`11,758.2
`12,296.9
`12,345.0
`11,854.4
`12,614.2
`13,740.9
`14,323.7
`14,584.7
`13,711.2
`Total Value
`Retail value is value of shipments at recommended or estimated list price
`
`1 Includes Singles and Albums
`2 Includes Master Ringtunes, Ringbacks, Music Videos, Full Length Downloads, and Other Mobile
`3Weighted Annual Average
`A Estimated payments in dollars to artists and record companies distributed by SoundExchange. Amounts based on prior yeal‘s collections and airplay
`5 While broken out for this chart, DVD Video Product is included in the Music Video totals
`6 Total includes Cassette Single, DVD Audio, and SACD shipments not broken out separately in this report
`7 Units total includes both albums and singles, and does not include subscriptions or royalties
`Permission to cite or copy these statistics is hereby granted, as long as proper attribution is given to the Recording Industry Association of America.
`
`% of Shipments
`Physical
`Digital
`
`
`
`
`
`2005
`91%
`9%
`
`2006
`84%
`16%
`
`2007
`77%
`23%
`
`2008
`68%
`32%
`
`SIGHTSOUND TECHNOLOGIES
`EXHIBIT 2127
`
`CBM2013-00020 (APPLE v. SIGHTSOUND)
`PAGE 000001
`
`
`
`News and Notes On 2008 RIAA Shipment Data
`
`Joshua P. Friedlander
`
`RIAA Vice President, Research and Strategic Analysis
`
`Sales of digital music continued growing at a rapid pace in 2008, and now constitute 32
`percent of the total market by value, and $2.7 billion in total shipments. Digital downloads
`grew 30 percent to $1.6 billion. Demonstrating the continuing maturation and adoption of
`the digital music download model, music fans are becoming increasingly comfortable
`buying full length albums online, with digital album growth rates exceeding those of
`digital singles. On a dollar basis, digital albums have grown from 25 percent of the
`download market in 2004 to 36 percent in 2008.
`
`If digital singles are converted into an album equivalent (divided by ten) and added to both
`CDs and digital albums, the overall album unit decline in 2008 was 14 percent (635
`million to 545 million).
`
`Distributions for digital performance rights, which includes payments to artists and labels
`for webcasting, satellite radio, and other digital music services, increased 74 percent to $82
`million in 2008. Though currently a small component of the overall market, performance
`revenues represent an increasingly important piece of the music industry landscape as fans
`shift listening habits to digital formats.
`
`The increase in digital shipments only partially offset the decline in shipments of physical
`products, as overall shipments fell 18 percent year-over-year to $8.5 billion. The market
`for physical recorded music goods fell 28 percent to $5.8 billion. Both CDs and music
`videos experienced significant declines.
`
`Vinyl continued to stage a comeback as the format more than doubled year-over-year to
`$57 million, the highest level since 1990. A favorite product of audiophiles and devout
`fans, shipments of vinyl were bolstered by the roll out of both new release and catalog
`material.
`
`Mobile unit shipments (including ringtunes, ringbacks, and full length content) were down
`7 percent year-over-year. Growth of 36 percent in full length (audio and video) mobile
`downloads and 18 percent in ringback tunes were offset by a 17 percent decline in
`ringtunes. Full length audio and video mobile downloads were 16 percent of the mobile
`market, and ringbacks accounted for another 16 percent of mobile shipments in 2008.
`
`For news media inquiries, please contact: Jonathan Lamy
`Cara Duckworth
`
`Liz Kennedy
`202/775-0101
`
`PAGE 000002
`
`
`
`
`
`2009 Year-End Shipment Statistics
`202-775-0101
`
`Manufacturers' Unit Shipments and Retail Dollar Value
`(In Millions, net after returns)
`
`Digital
`(Units Shipped)
`(Dollar Value)
`
`Download Single
`
`Download Album
`
`Kiosk1
`
`Music Video
`
`Total Units
`Total Value
`
`2008
`1,042.7
`1,032.2
`63.6
`635.3
`1.6
`2.6
`20.8
`41.3
`1,128.6
`1,711.5
`405.1
`977.1
`1.6
`221.4
`
`% CHANGE
`2008-2009
`9.2%
`18.2%
`20.2%
`20.2%
`7.9%
`147.1%
`-1.9%
`-1.9%
`9.6%
`18.7%
`-24.5%
`-25.4%
`-25.5%
`-3.7%
`
`1,138.3
`1,220.3
`76.4
`763.4
`1.7
`6.3
`20.4
`40.6
`1,236.8
`2,030.7
`305.8
`728.8
`1.2
`213.1
`
`Subscription3
`DVD Video5
`
`Digital Performance Royalties4
`
`100.0
`
`155.5
`
`55.5%
`
`Physical
`
`CD
`
`CD Single
`
`Cassette
`
`LP/EP
`
`Vinyl Single
`
`Music Video
`
`Total Unitss
`Total Values
`Total Retail Units
`Total Retail Value
`
`368.4
`5,471.3
`0.7
`3.5
`0.1
`0.9
`2.9
`56.7
`0.4
`2.9
`12.8
`218.9
`12.3
`215.7
`385.5
`5,758.5
`332.5
`5,474.3
`
`292.9
`4,274.1
`0.9
`3.1
`0.0
`0.0
`3.2
`60.2
`0.3
`2.5
`12.1
`218.1
`11.5
`212.9
`309.5
`4,562.0
`272.0
`4,382.2
`
`-20.5%
`-21.9%
`17.8%
`-12.5%
`-102.8%
`-104.9%
`10.8%
`6.2%
`-30.2%
`-15.3%
`-5.2%
`-0.4%
`-6.4%
`-1.3%
`-19.7%
`-20.8%
`-18.2%
`-20.0%
`
`Total Digital & Physical
`Total Units7
`Total Value
`
`% of Shipments
`Physical
`Digital
`
`1,919.2
`8,768.4
`
`1,852.1
`7,690.0
`
`-3.5%
`-12.3%
`
`66%
`34%
`
`59%
`
`
`41%
`
`Retail value is value of shipments at recommended or estimated list price
`Note: Historical digital data updated for 2008
`1 Includes Singles and Albums
`2 Includes Master Ringtunes, Ringbacks, Music Videos, Full Length Downloads, and Other Mobile
`3Weighted Annual Average
`4 Estimated payments in dollars to performers and copyright holders distributed by SoundExchange
`5 While broken out for this chart, DVD Video Product is included in the Music Video totals
`6 Total includes Cassette Single, DVD Audio, and SACD shipments not broken out separately in this report
`7 Units total includes both albums and singles, and does not include subscriptions or royalties
`Permission to cite or copy these statistics is hereby granted, as long as proper attribution is given to the Recording Industry Association of America
`
`PAGE 000003
`
`
`
`News and Notes On 2009 RIAA Shipment Data
`
`Joshua P. Friedlander
`
`RIAA Vice President, Research and Strategic Analysis
`
`In 2009 digital formats comprised a record 41 percent of total music shipments in the United
`States. This is an increase from 34 percent in 2008, and 25 percent in 2007. The total digital
`music market reached $3.1 billion for 2009. Digital downloads continued double digit growth in
`the past year reaching $2.0 billion, 19 percent growth over the 2008 total of $1.7 billion. Digital
`album growth continued to grow faster than single tracks, and on a dollar basis comprised 38
`percent of the download market.
`
`Distributions for digital performance rights, which include payments to performers and copyright
`holders for webcasting, satellite radio, and other non-interactive digital music services, increased
`55 percent to $155 million in 2009. Performance revenues represent an increasingly important
`piece of the music industry landscape as fans shift listening habits to digital formats.
`
`Overall shipments of recorded music in the United States fell 12 percent to $7.7 billion. Growth
`in digital formats only partially offset a decline of 21 percent in physical formats. The decline in
`CD shipments accounted for virtually all the decline on the physical side, though vinyl continued
`to be a positive note, again growing in 2009. Music videos remained flat year-over-year.
`
`Mobile shipments (including ringtunes, ringbacks, and full length content) declined 25 percent in
`2009 to $729 million. Ringtunes experienced a sharp decline of 34 percent, while ringbacks fell
`11 percent in value. Full track mobile downloads were down 5 percent. Ringtones continue to
`make up the majority of the mobile digital music market, with 60 percent share of the category
`by value. Ringbacks grew to 20 percent of the market from 16 percent in 2008, and full length
`tracks and music videos were 19 percent in 2009 versus 16 percent the prior year.
`
`Data note: The RIAA presents the most up-to-date information available in its annual shipment
`reports and new online subscription-only shipment statistics database. Based on additional
`market research, historical data for the digital categories has been updated for 2007 and 2008.
`
`For news media inquiries, please contact: Jonathan Lamy
`Cara Duckworth
`
`Liz Kennedy
`202/775-0101
`
`PAGE 000004
`
`
`
`
`
`
` l
`“comma mnusrnv
`
`flTlflN
`
`AM
`”50%
`
`
`2010 Year-End Shipment Statistics
`202-775-0101
`
`Manufacturers' Unit Shipments and Retail Dollar Value
`(In Millions, net after returns)
`
`Digital
`
`(Units Shipped)
`(Dollar Value)
`
`Download Single
`
`Download Album
`
`Music Video
`
`Total Units
`Total Value
`
`.
`.
`Subscrlptlon
`
`3
`
`Digital Performance Royalties4
`
`1,138.3
`1,220.3
`76.4
`763.4
`1.7
`6.3
`20.4
`40.6
`
`1,236.8
`2,030.7
`
`305.8
`728.8
`1.2
`213.1
`
`155.5
`
`1,162.4
`1,366.8
`83.1
`828.8
`1.7
`6.4
`18.1
`36.1
`
`1,265.4
`2,238.1
`
`220.5
`526.7
`1.5
`2009
`
`249.2
`
`% CHANGE
`2009-2010
`2.1%
`12.0%
`8.8%
`8.6%
`-3.4%
`1.2%
`-11.1%
`-11.1%
`
`2.3%
`10.2%
`
`-27.9%
`-27.7%
`29.9%
`
`60.3%
`
`-22.9%
`-21.4%
`31.2%
`
`25.9%
`44.4%
`-3.9%
`-9.4%
`-22.6%
`-15.7%
`-22.4%
`-15.3%
`
`-22.2%
`
`-20.2%
`-21.8%
`-19.6%
`
`
`DVD Videos
`
`Physical
`
`(Units Shipped)
`(Dollar Value)
`
`CD
`
`.
`
`2929
`4,274.1
`0.9
`
`225.8
`3,361.3
`1.2
`
`LPIEP
`
`Vinyl Single
`
`Music Video
`
`Total Units6
`
`Total Value6
`Total Retail Units
`Total Retail Value
`
`4 0.
`
`87.0
`0.3
`2.2
`9.1
`178.8
`8.7
`175.3
`
`240.5
`
`3,635.1
`
`3 2.
`
`60.2
`0.3
`2.5
`11.8
`212.0
`11.2
`206.9
`
`309.2
`
`4,555.9
`271.7
`4,376.1
`
`Total Digital & Physical
`Total Units7
`Total Value
`
`
`
`1,851.8
`7,683.9
`
`1,726.3
`6,850.1
`
`-6.8%
`-10.9%
`
`% of Shipments
`Physical
`Digital
`
`2009
`59%
`41%
`
`2010
`53%
`47%
`
`Retail value is value of shipments at recommended or estimated list price
`Note: Historical digital data updated for 2007 and 2008
`
`1 Includes Singles and Albums
`2Includes Master Ringtunes, Ringbacks, Music Videos, Full Length Downloads, and Other Mobile
`3Weighted Annual Average
`4 Estimated payments in dollars to performers and copyright holders distributed by SoundExchange
`5 While broken out for this chart, DVD Video Product is included in the Music Video totals
`6 Total includes Cassette Single, DVD Audio, and SACD shipments
`7 Units total includes both albums and singles, and does not include subscriptions or royalties
`
`Permission to cite or copy these statistics is hereby granted, as long as proper
`attribution is given to the Recording Industry Association of America.
`
`PAGE 000005
`
`
`
`News and Notes on 2010 RIAA Music Shipment Data
`
`Joshua P. Friedlander
`
`RIAA Vice President, Research and Strategic Analysis
`
`The US. total digital music market grew to $3.2 billion in 2010, up 3% from the prior year.
`
`Digital downloads continued double digit annual growth reaching $2.2 billion, a 10% increase
`
`over the 2009 total of $2.0 billion. Although digital download unit growth was only 2%,
`
`stronger growth in albums and the first full year of variable pricing contributed to the larger
`
`growth in value. Digital albums and tracks grew by value at 9% and 12% rates, respectively.
`
`Overall, digital formats comprised a record 47% of total music shipments in the United States.
`
`For comparison, digital shipments only accounted for 9% of the market back in 2005.
`
`Distributions for digital performance rights, which include payments to performers and
`
`copyright holders for webcasting, satellite radio, and other non-interactive digital music
`
`services, increased 60% to $249 million in 2010. Performance revenues represent an
`
`increasingly important piece of the music industry landscape as fan interest grows in digital
`
`listening and access formats.
`
`Overall shipments of recorded music in the United States fell 11% to $6.9 billion. Growth in
`
`digital formats only partially offset a decline of 20% by value in physical formats. The decline in
`
`CD shipments accounted for the vast majority of the decline on the physical side, though vinyl
`
`albums continued to be a positive note, growing in 2010 by 44% to $87 million — their highest
`level since 1990.
`
`Mobile shipments (including ringtunes, ringbacks, and full length content) declined 28% in 2010
`to $527 million. Ringtunes experienced a steep decline of 41%, while ringbacks fell 26% in
`
`value. Full track mobile downloads were down 23% (full track purchases made on mobile
`
`devices through online stores, rather than mobile content stores, are counted as digital
`
`downloads).
`
`In 2010, ringtones accounted for about half of the mobile digital music market,
`
`with 49% share of the category by value. Ringbacks remained at 20% of the market, in-line with
`
`2009, while full length tracks and music videos grew to 31% in 2010 versus 19% the prior year.
`
`The RIAA presents the most up-to-date information available in its annual shipment reports and
`
`subscription-only online shipment statistics database (www.riaa.com[shipmentlogin.php).
`
`Based on additional market research, historical data for the music video category has been
`
`updated for 2008 and 2009.
`
`For news media inquiries, please contact: Jonathan Lamy
`Cara Duckworth
`
`Liz Kennedy
`
`202/775-0101
`
`PAGE 000006
`
`
`
` REPRESENTING
`
`
`
`MUSIC
`
`2011 Year-End Shipment Statistics
`202-775-0101
`
`Manufacturers' Unit Shipments and Retail Dollar Value
`(In Millions, net after returns)
`
`Digital
`
`% CHANGE
`2010-2011
`
`10.9%
`13.3%
`22.1%
`25.1%
`-18.3%
`-4333,
`-11.6%
`
`11.3%
`17.3%
`-38.5%
`-38.1%
`
`18.9%
`13. 5%
`
`17. 2%
`
`-4.8%
`-8.5%
`28.3%
`13.4%
`31.5%
`34.2%
`19.7%
`33.3%
`-15.0%
`43.0%
`
`-15.1%
`-14.8%
`-4.5%
`-7.7%
`
`-4.7%
`-7.8%
`
`Synchronization Royalties5188.7
`
`Physical
`
`(Units Shipped)
`(DollarValue)
`
`CD
`
`.
`CD Smg'e
`
`MP
`.
`.
`W Smg'e
`.
`.
`
`3
`
`.
`DVD V'de°
`Total Units
`Total Value
`
`Total Retail Units
`Total Retail Value
`
`253.0
`3,389.4
`1.0
`
`240.8
`3,100.7
`1.3
`
`4.2
`
`0.3
`
`9.1
`377.3
`
`8.5
`169.7
`267.7
`3,663.9
`
`233.0
`3,438.7
`
`5.5
`333.4
`0.4
`
`7.7
`331.0
`
`7.2
`144.5
`255.7
`3,381.1
`
`222.0
`3,170.9
`
`(Units Shipped)
`(Dollar Value)
`
`D°w"'°ad smg'e
`
`D°w"'°ad “mm
`.
`
`1
`
`.
`
`.
`
`Total Units
`Total Value
`
`t'
`s b
`” scr'p '°”
`
`
`
`_igitalPerformance Royalties4
`
`1,177.4
`1 ,3.17 4
`85. 8
`872. 4
`1.7
`
`18.4
`
`1,283.4
`2,232.9
`188.5
`448.0
`
`1. 5
`212. 4
`
`249. 2
`
`1 ,.306 2
`1 ,4.92 7
`104. 8
`1 ,091. 4
`1.4
`3.3
`16.3
`
`1,428.6
`2,619.7
`115.9
`277. 4
`
`1. 8
`241. 0
`
`292.0
`
`196.5
`
`
`
`
`Total Digital & Physical
`
` Total Units7
`
`1,739.6
`6,995.0
`
`1,800.2
`7,007.7
`
`3.5%
`0.2%
`
`Total Value
`
`% of Shipmentsg
`Physical
`Digital
`
`2010
`54%
`46%
`
`2011
`50%
`50%
`
`Retail Value is the value of shipments at recommended or estimated list price
`Note: Historical data updated for 2009 and 2010
`
`1Includes Singles and Albums
`2 Includes Master Ringtunes, Ringbacks, Music Videos, Full Length Downloads, and Other Mobile
`3Weighted annual average number of subscribers
`4 Estimated payments in dollars to performers and copyright holders distributed by SoundExchange
`5 Includes fees and royalties from synchronization of sound recordings with other media
`6 While broken out for this chart, DVD Video Product is included in the Music Video totals
`7 Units total includes both albums and singles, and does not include subscriptions or royalties
`8 Synchronization Royalties excluded from calculation
`
`Permission to cite or copy these statistics is hereby granted, as long as proper
`attribution is given to the Recording Industry Association of America.
`
`PAGE 000007
`
`
`
`News and Notes on 2011 RIAA Music Shipment Data
`
`Joshua P. Friedlander
`
`RIAA Vice President, Strategic Data Analysis
`
`While the industry remains less than half the total value at its high in 1999, total U.S. music
`
`shipments in 2011 were up for the first time since 2004, albeit slightly, versus the prior year.
`
`Total shipments of $7.0 billion were up 0.2% when compared with 2010. Digital sales grew
`
`9.2% compared with 2010, offsetting the physical decrease of 7.7%, a much smaller decline in
`
`physical than experienced in recent years. Overall, digital formats comprised slightly above
`
`50% of total music shipments in the United States, as digital became more than half the market
`
`for the first time ever. Diversification among formats continued to widen, as a greater amount
`
`of shipments came from non-traditional formats than ever before.
`
`Digital downloads in 2011 totaled $2.6 billion, up 17% from the prior year. Digital albums
`
`showed particularly strong gains, up 25% by value to $1.1 billion, and surpassing 100 million in
`
`volume for the first time. Digital individual track sales also grew to $1.5 billion, and 1.3 billion
`
`copies.
`
`Revenues from music subscription services grew to a new high in 2011 of $241 million, an
`
`increase of 13% from the prior year. The number of users also grew from 1.5 to 1.8 million.
`
`Growth in both digital performance royalties and subscription services indicates increasing
`
`consumer demand for music access models, which give fans the ability to listen to incredibly
`
`broad selections of music whenever and wherever they want.
`
`Distributions for digital performance royalties, which include payments to performers and
`
`copyright holders for webcasting, satellite radio, and other non-interactive digital music
`
`services, increased 17% to $292 million in 2011. Revenues from digital performance royalties
`
`for the first time surpassed the sales of ringtunes, ringbacks, and other mobile products, which
`
`fell 38% to $277 million in 2011. Ringtunes declined 39%, while ringbacks fell 28% (both by
`
`value). Ringtunes accounted for 56% of the mobile digital music market by value, and ringbacks
`were 28%.
`
`The RIAA shipment report is for the first time including royalties from synchronization of
`
`recorded music with other content (such as movies, TV, video games, or other media). Data
`
`back to 2009 is included for comparison. Synchronization royalties were up 4% year-over-year,
`
`to $196 million in 2011. Note that synchronization royalties are effectively included at
`
`wholesale value since there is no retail value for comparison, and are not adjusted to represent
`
`non-major label distributed content. They are excluded from the calculation of the digital
`
`market percentage.
`
`The decline of 7.7% by total value in physical formats was primarily accounted for by an 8.5%
`
`value decline in CD shipments. Although still only 2% of the overall market, vinyl albums
`
`continued to grow in 2011, up 34% versus the prior year to $119 million, with more than 5
`
`million units shipped.
`
`PAGE 000008
`
`
`
`The 2011 music industry shipment data confirms that digital music has truly become
`
`mainstream, though there are certainly still challenges presented by massive volumes of digital
`
`theft. Half of industry shipments came through digital channels in 2011, and digital downloads
`
`- hardly a new format anymore - have continued growing. More than 100 million digital albums
`
`were sold in a year for the first time. Access models like subscription services and Internet
`
`radio (represented by digital performance royalties) have continued to grow both in popularity
`
`as well as in their revenue contribution to the industry. No longerjust a niche, digital music has
`
`shown it can be a model - or perhaps more accurately a variety of models - for the music
`
`industry going forward.
`
`Please note that the RIAA presents the most up-to-date information available in its annual
`
`shipment reports and subscription-only online shipment statistics database
`
`(htt
`: www.riaa.com ke statistics. h ?content selector=riaa-shi ment-database-lo -in).
`
`Based on additional market research, historical data has been updated for 2009 and 2010.
`
`For news media inquiries, please contact: Jonathan Lamy
`
`Cara Duckworth Weiblinger
`
`Liz Kennedy
`
`202/775-0101
`
`PAGE 000009
`
`
`
`
`
`2012 Year-End Industry Shipment and Revenue Statistics
`202-775-0101
`
`United States Unit Shipments and Estimated Retail Dollar Value
`(In Millions, net after returns)
`
`Digital Permanent Download
`i
`
`2011
`2012
`@gfi'gff
`(Units Shipped)
`.
`1,332.3
`1,392.2
`4.5%
`
`(Dollar Value)
`D°W"'°ad S'"g'e
`$1,522.4
`$1,623.6
`6.7%
`103.9
`116.7
`12.3%
`
`D°Wnl°ad Album
`$1 ,070.8
`$1,204.8
`12.5%
`
`K.
`k,
`1.3
`2.0
`55.9%
`'°s
`$2.7
`$3.7
`36.6%
`.
`.
`16.3
`10.5
`-35.6%
`
`MUS": V'de°
`$32.4
`$20.8
`-35.6%
`.
`2
`115.4
`69.3
`—40.0%
`
`M°b"e
`$276.2
`$166.9
`-39.6%
`
`Digital Subscription & Streaming
`
`SoundExchange Distributions3
`$292.0
`$462.0
`58.2%0
`
`$359.2
`$570.8
`58.9%
`Subscription & Streaming Not Distributed by SoundExchange‘
`1'8
`3'4
`866A)
`
`
`$3,555.6
`$4,052]
`14.0%
`TOTAL DIGITAL VALUE
`
`
`Synchronization Royalties5
`$196.5
`$190.6
`-3.0%
`
`
`
`
`
`
`
`
`Physical
`
`(Units Shipped)
`CD
`240.8
`210.9
`—12.4%
`(Dollar Value)
`$31007
`$25320
`-18.3%
`.
`1.3
`1.1
`-16.2%
`
`CD angle
`$3.5
`$3.2
`-7.6%
`5.5
`7.1
`28.8%
`
`LP’EP
`$119.4
`$162.6
`36.2%
`.
`.
`0.4
`0.4
`6.6%
`
`V”“" S'"g'e
`$4.6
`$4.7
`3.0%
`.
`.
`7.7
`6.2
`—19.2%
`
`MUS": V'de°
`$151.0
`$118.2
`—21.7%
`.
`0.0
`0.0
`—10.0%
`
`DVD AUd'°
`$0.3
`$0.2
`—31.5%
`0.1
`0.1
`—13.3%
`SACD
`$1.5
`$1.3
`—13.0%
`Total Physical Units
`255.7
`225.8
`41.7%
`
`Total Physical Value
`$3,381.1
`$2,822.2
`46.5%
`Total Retail Units
`222.0
`182.9
`47.6%
`
`Total Retail Value
`$3,170.9
`$2,584.3
`-18.5%
`
`TOTAL DIGITAL AND PHYSICAL
`
`-0.5%
`1,816.5
`1,824.9
`Total Units6
`
`Total Value
`$7,133.1
`$7,065.5
`-0.9%
`
`
`
`
`
`Foralistofauthorizedservicesseewww.whymusicmatters.com
`
`Retail Value is the value of shipments at recommended or estimated list price
`Note: Historical data updated for 2011
`
`% of Shipments7
`Physical
`Digital
`
`2011
`49%
`51%
`
`2012
`41%
`59%
`
`1Includes Singles and Albums
`2 Includes Master Ringtunes, Ringbacks, Music Videos, Full Length Downloads, and Other Mobile
`3 Estimated payments in dollars to performers and copyright holders for digital radio services under statutory licenses
`4 Streaming, tethered, and other subscription and non-subscription audio and music video services (including ad-supported) not operating under statutory licenses.
`Services with no retail value equivalent included at wholesale value.
`Volume is annual average number of subscribers for subscription services.
`5 Includes fees and royalties from synchronization of sound recordings with other media
`6 Units total includes both albums and singles, and does not include subscriptions or royalties
`/ Synchronization Royalties excluded from calculation
`Permission to cite or copy these statistics is hereby granted, as long as proper
`attribution is given to the Recording Industry Association of America.
`
`PAGE 000010
`
`
`
`News and Notes on 2012 RIAA Music Industry Shipment and Revenue Statistics
`
`Joshua P. Friedlander
`
`Vice President, Strategic Data Analysis, RIAA
`
`Though revenues are still well below the highs of over a decade ago, total US music industry
`
`revenues showed a second year of stabilization relative to the steep declines of prior years.
`
`Overall recorded music sales revenues for 2012 were $7.1 billion, down 0.9%, after a slight
`increase from 2010 to 2011.
`
`Figure 1
`
`Total US Music Industry Revenues
`
`SBillions
`
`
`
`
`
`$51—.—.-—l
`2009
`2010
`2011
`2012
`
`Source: RIAA
`
`Industry revenues from digital formats continued to grow, and in 2012 surpassed $4 billion for
`the first time ever, up 14.0% versus the prior year. Overall, digitally distributed formats
`
`comprised 59% of the total US market by dollar value in 2012, after crossing the 50% threshold
`for the first time in 2011.
`
`Digital growth was driven by large increases in revenues through what can broadly be referred
`
`to as ”access models”, where users can choose to listen from large libraries of music rather
`
`than purchasing individual songs or albums. This category includes revenues from subscription
`services (such as Rhapsody and paid versions of Spotify, among others), streaming radio service
`
`revenues that are distributed by SoundExchange (like Pandora, SiriusXM, and other Internet
`
`radio), and other non-subscription streaming services (such as YouTube, Vevo, and ad-
`
`supported Spotify, which this year are included for the first time in this report).
`
`PAGE 00001 1
`
`
`
`Figure 2
`
`20?
`0
`
`15%
`
`10%
`
`5%
`
`0%
`
`Proportion of Total Industry Revenues From
`Access Models
`
`15%
`
`9%
`
`7%
`
`4%
`
`0
`5A
`
`3%
`
`
`
`2007
`
`2008
`
`2010
`2009
`Source: RIAA
`
`2011
`
`2012
`
`These types of services have quickly become significant revenue contributors for the industry.
`
`Collectively, they went from just 3% of total industry revenues in 2007 to 15% in 2012, totaling
`
`over $1 billion for the year. Distributions for digital performance royalties from
`SoundExchange, which include payments to performers and copyright holders for webcasting,
`
`satellite radio, and other non-interactive digital music services, increased 58% to $462 million in
`2012.
`
`Revenues from subscription services and streaming services that do not fall under a statutory
`
`license were $570.8 million in 2012, up 58.9% from $359.2 million in 2011. Note these figures
`include retail revenues for paid services, as well as wholesale revenues for services like ad-
`
`supported streaming that do not have a retail price. The number of digital subscribers to paid
`
`on-demand services also reached a new high at 3.4 million.
`
`Digital downloads, including albums, single tracks, videos, and kiosk sales were up 8.6% by
`
`value, from $2.6 billion in 2011 to $2.9 billion in 2012. Digital albums continued to grow, from
`$1.1 billion to $1.2 billion (12.5%) in 2012. Digital album volume of 116.7 million marked the
`second year in which the total exceeded 100 million. Digital albums accounted for 35% of all
`album sales by volume, up from 30% in 2011. Digital tracks also grew but at a slower pace, up
`in total value 6.7% from $1.5 billion in 2011 to $1.6 billion.
`
`After a more moderate decline in 2011, there was a significant decline in the physical market in
`2012. Overall value was down 16.5%, from $3.4 billion in 2011 to $2.8 billion in 2012. Physical
`shipment volumes were down less at 11.7%, indicating a lower average price for music sales in
`
`PAGE 000012
`
`
`
`physical formats. Vinyl though continued to grow, up 36% in value to $163 million in 2012,
`nearly equaling the total for ringtones, ringbacks, and other mobile products, but still only 2%
`of the overall market.
`
`The 2012 music industry revenue results show a mix of a continuation of trends from previous
`
`years, along with the emergence of new developments. Overall revenues were relatively
`
`steady at $7.1 billion. The mix of digitally distributed formats continued to increase, and the
`industry is now digital to a greater degree than ever before, with both new formats and
`
`permanent downloads contributing growth to a nearly 60% digital industry. The growth of
`access models show that formats where fans can listen from vast libraries rather than making
`
`individual purchases are gaining traction and making a significant contribution to the industry
`
`today.
`
`Please note that the RIAA presents the most up-to-date information available in its annual
`
`industry revenue reports and subscription-only online statistics database
`
`(htt
`: www.riaa.com ke statistics. h ?content selector=riaa-shi ment-database-lo -in).
`Based on additional market research, historical data has been updated for 2011 as well.
`
`For news media inquiries, please contact: Jonathan Lamy
`
`Cara Duckworth Weiblinger
`Liz Kennedy
`202/775-0101
`
`PAGE 000013
`
`