IFPI Report: Global recorded music market up 8.1% to $17.3b, new markets grow, but Australia holds on
The global recorded music market increased revenues by 8.1% to reach US$17.3 billion in 2017, according to the IFPI Global Music Report issued overnight.
Australia posted a 13.4% growth to $413 million and equipped itself against other countries in the way it is making money out of the streaming phenomenon.
Streaming in this country grew by 62.4% (compared to its average 41% rise around the world), which more than compensated for the 11% decline in physical.
The low amount of domestic music on the Australian charts will obviously change this year after the new commercial radio quota monitoring by ARIA and APRA AMCOS kicked in on April 1 and showed an immediate shift.
However, despite that, Australia will come under pressure from the competition by rapidly growing newer music markets.
As a result of South Korea’s performance, Australia has slipped down from 7th largest music market to 8th.
China entered the Top 10 list for the first time. India, currently at #19, is expected to similarly boom.
More new markets will be targeted.
At the report’s launch in London, Adrian Granite, EVP of market development at Universal Music pointed out that China, Africa, India and the Middle East collectively have a population of 4 billion.
“The path to reaching these 4 billion people is now illuminated by smartphone penetration and global streaming services,” he noted.
The mood at the report’s launch was distinctly upbeat, particularly as a third year of consecutive growth and the new markets being opened up by streaming is putting to bed 15 years worth of doom and gloom.
The industry is officially working on a new business model dominated by streaming for the first time.
But IFPI CEO Frances Moore had two warnings:
Firstly, the 2017 figures are still only 68.4% of the market’s peak in 1999.
Secondly, the current rapid growth will not sustain if the value gap problem is not fixed.
She noted that while governments in the US and Europe are reviewing the value gap, Australia was an example where heavy lobbying by the creative industries pushed back plans by the federal government to expand safe harbour provisions.
Moore said, “The industry is continuing on its path to recovery but the race is far from won.”
She explained: “The growth that we have seen over the past three years of consecutive growth has really been driven by this industry and their investment in artists and investment in innovation and constantly striving to make the music experience better.
“But as much as the industry can do a lot – and has done a lot on its own – there is a structural fault in the system.”
This fault was the reason why the music industry made $5.6 billion from paid and ad-supported services in 2017, but just $856 million from video platforms like YouTube who had five times more customers.
Nevertheless, there was much to have wide grins about.
Streaming last year became the single largest biggest revenue source for the industry, now accounting for 38.4%. and accounting for $6.6 billion.
There was a 45.5% growth in paid streaming.
By the end of 2017, there were 176 million users of paid subscription accounts globally. 64 million were added during the year’s 12 months.
Digital is rapidly taking over: in 2017, six new markets reported the digital format overtaking physical for the first time. This brings the total up to 32.
Digital makes up 54.3% of revenue, up from 50% the year before. It now generates revenue of $9.4 billion, a jump of 19.1%.
In other figures from the IFPI report:
* The US remains the biggest music market, followed by (2) Japan (3) Germany (4) UK (5) France (6) South Korea (7) Canada (8) Australia (9) Brazil and (10) China.
* Download revenue went down by 20.5%.
* Physical revenue dropped by 5.4% to $5.2 billion, accounting for 30% of the global market
* Revenue from the use of recorded music by broadcasters and public venues increased 2.3% to $2.4 billion, officially accounting for 14% of total revenue.
* The biggest global artist in 2017 was Ed Sheeran, whose ‘Shape Of You’ was top digital track seller with 26.6 million and Divide was the top global album with 6.3 million.
* Drake was the second biggest global artist, followed by Taylor Swift, Kendrick Lamar, Eminem, Bruno Mars, The Weeknd, Imagine Dragons, Linkin Park and The Chainsmokers.
The report’s case studies of artists included Australia’s Nashville-based Morgan Evans as one of the country’s new guns.