What's Happening?
The Recording Industry Association of America (RIAA) has transitioned from reporting U.S. music industry revenues at retail values to wholesale values. This change aligns RIAA's reporting with international standards, such as the IFPI’s global music report. Historically, the RIAA reported revenues at retail values, which included consumer markups, providing a comprehensive view of the industry's health. The shift to wholesale values, which reflect the actual revenue received by labels, presents a smaller figure than retail values. This change affects the ability to compare historical data, as individual sales and streaming metrics were not previously broken out at wholesale values.
Why It's Important?
The shift to wholesale reporting alters the perception of the music industry's growth, as historical comparisons are now limited. This change impacts stakeholders who have relied on retail data to assess market trends and consumer behavior. The transition may lead to a reevaluation of industry health metrics and necessitate adjustments in strategic planning for record labels and artists. The RIAA's decision reflects a broader trend towards standardization in global music reporting, which could influence how the U.S. music industry is perceived internationally.
What's Next?
The RIAA is updating its digital database to include wholesale numbers, expected to be available with the release of full-year 2025 figures. Industry stakeholders may need to adjust their analysis and reporting practices to accommodate the new metrics. The RIAA's future reports will likely continue to emphasize wholesale values, potentially prompting other industry organizations to adopt similar standards.
