In a 2017 revenue report best summarized by the subheadline “Fragile Recovery Continues,” the U.S. music industry saw its revenues from recorded music grow 16.5% at estimated retail value to $8.7 billion — continuing the growth from 2016 and marking the first time since 1999 the revenues have grown “materially” since 1999, according to the report, which was issued today by the Record Industry Association of America (RIAA). “We‘re delighted by the progress so far, but to put the numbers in context, these two years of growth only return the business to 60% of its peak size — about where it stood ten years ago — and that’s ignoring inflation,” chairman/CEO Cary Sherman said in a letter accompanying the report. “And make no mistake, there’s still much work to be done in order to make this growth sustainable for the long term.” (Read the full report here.)

Like 2016, the boost came primarily from the rapid growth in paid music subscriptions to services like Spotify, Amazon, Apple Music, Tidal, Pandora and others, which grew by more than 50%. However, the report elaborates on Sherman’s caution that the industry “has taken a decade to return to the same overall revenue level as 2008, and is still 40% below peak levels as the growth from streaming has been offset by continued declines in revenues from both physical and digital unit based sales.”

Nearly all of the growth came from streaming, which accounted for nearly two-thirds of total U.S. music industry revenues in 2017, according to the report. Total revenues from streaming platforms were up 43% to $5.7 billion, with year-over-year revenue growth of 63% brought total subscription revenues to more than $4 billion for the first time, making it by far the biggest format of recorded music in the United States, comprising 47% of the total market. The number of paid subscriptions to full on- demand services grew 56% to average 35.3 million for the year, compared with 22.7 million in 2016. More than 80% of overall revenue stemmed from of digital platforms and services.

(Note: Starting in 2016, the RIAA began differentiating between full-service paid subscriptions and some “limited tier” services such as Amazon Prime and Pandora Plus, and other subscriptions are included in this category. In 2017, this group represented 14% of the subscription market by value, up from 11% in 2016, according to the report.)

Elsewhere, vinyl continued its healthy growth and helped shipments of physical products to decrease just 4% to $1.5 billion in 2017, a lower rate of decline than in recent years. Vinyl “continues to be a bright spot among physical formats” with revenues up 10% to $395 million, the report says. Shipments of CDs continued to drop, falling 6% in 2017 to $1.1 billion. Revenues from shipments of physical products made up 17% of the industry total in 2017.

Revenues from digital downloads fell 25% to $1.3 billion in 2017.

In accounting for the growth, Sherman wrote, “More than any other creative industry, music companies successfully transformed themselves ahead of the transition to streaming, all while forging stronger relationships with their most important partner: the artist,” he wrote, showing perhaps a selective memory of the years in which the music industry doggedly fought or denied the digital revolution that began with the arrival of Napster in 1999, although it eventually adapted and the tide has clearly turned since Spotify launched in the U.S. in 2011. “This remarkable re-invention didn’t happen by accident. It is the result of years of painstaking work by record labels who continue to strengthen the teams and systems necessary to support an artist’s ambition, all while working closely with hundreds of digital platforms to bring music to fans in new and innovative ways.”

He continued by singling out terrestrial radio and SiriusXM as contributing to the “value gap” between “the amount of music being consumed and the compensation that platforms return to music creators for exploiting the music” — but oddly did not directly mention YouTube, which has been identified by many knowledgeable outlets, including the IFPI, as the main contributor to that value gap. However, its name does appear in a graphic and is widely mentioned in an article linked to the words “value gap” in his letter — subtle references for a service that is accurately described in the report as “the most widely used music service,” although an RIAA rep assured Variety that the organization’s focus is on forthcoming reform legislation and its critical stance toward YouTube remains. (Sherman lambasted YouTube over its royalty payments last August in response to an essay by the service’s music chief Lyor Cohen.)

“The playing field remains unfairly tilted at the expense of creators and digital music services, resulting in a ‘value gap,’” he continued. “The economic consequences are real and increasingly documented by leading academics. Even as the shift to streaming powers the industry’s recovery, the digital migration also exposes the growing gap in our core rights — because, under current laws, not all platforms pay artists and labels fair rates reflecting market value for the use of their music. This includes terrestrial AM/FM radio, which inexplicably pays artists and labels nothing for the commercial use of their music, and SiriusXM, which pays under a below-market rate standard set more than 20 years ago when Sirius and XM were mere start-ups instead of the merged, wildly successful satellite service it is today.”

This, naturally, is leading up to the pending reform legislation on Capitol Hill, of which radio is a focus. “In Washington, Congress appears poised to advance a package of reforms that will modernize music licensing for the benefit of songwriters, recording artists, producers and digital music services alike, which we enthusiastically support,” Sherman continues. “In addition to ensuring that all platforms pay based on the same market-based rate standard, a vital piece of that bipartisan legislative package — the CLASSICS Act — would correct one of the most glaring injustices in the streaming music economy: Because of a quirk in the law, legacy artists who recorded music before 1972 are not guaranteed royalties under federal copyright law when their music is played on digital radio outlets. The proposed legislation would ensure that all recordings are treated the same — and countless artists have encouraged Congress to enact this essential reform.

“We are excited by the prospects for a better future,” Sherman’s letter concludes, “but also humbled by the work yet to be done.”