ADAPTING TO DIGITAL Jessie Richard

Vice President, Public Policy, RIAA jrichard@riaa.com

Physical Digital Download Streaming Perf Rights & Sync

Modest growth after a long decline

PHYSICAL Sales of all physical formats, including CD and vinyl

DOWNLOADS Permanent downloads (and mobile revenues)

SYNCH Music used in broadcast and public performance and royalties from tv, film, and games

STREAMING Audio and video streaming revenues, paid and ad-supported, including internet and satellite radio

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$8.7 billion

$14.6 billion

2

Revenue Composition:

STREAMING 65%

DIGITAL DOWNLOADS

15% PHYSICAL

17% SYNCH 3%

U.S. REVENUES 2017

STREAMING 4%

DIGITAL DOWNLOADS

30%

PHYSICAL 66%

U.S. REVENUES 2008

Streaming Nearly 2/3 of Market In 2017

Source: RIAA 3

First Year With ~ 1 Trillion Streams

[CATEGORY NAME]

[VALUE] [CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

By number of streams

Source: Nielsen SoundScan, BuzzAngle, Pandora public filings, RIAA estimates

4

The Value Gap at Work PAYMENTS TO MUSIC CREATORS FOR 1,000 STREAMS

Source: RIAA Analysis and estimates of company data, MiDIA Research and Manatt, Phelps & Phillips, LLP graphic *Note: Spotify blended rate across all service tiers

$0

$2

$4

$6

$8

$10

$12

$14

5

Challenges in Monetizing Streaming

6

Facilitating a Diverse, Competitive Marketplace

7

Thank You!