Report: A breakdown of how much the majors made in H1 2016

Image: OneRepublic

In April this year, global figures for 2015 from the International Federation of The Phonographic Industry (IFPI) indicated that the recorded music industry was worth US$15 billion (A$19.8 billion) and in growth. It was up 3.2% as digital revenues overtook physical for the first time after accounting for 45% of all sales.

It also reported a 10.2% rise in digital revenues to US$6.7 billion ($8.8 billion). A 45.2% increase in streaming revenue, more than offset the decline in downloads and physical formats

Now the first six months of 2016 have seen the three major labels generate US$5 billion ($6.6 billion) in thefirst half of 2016 – and Universal took the lion’s share, according to an analysis report by Music Business Worldwide (MBW).

Universal Music Group, Sony Music Entertainment and Warner Music Group’s recorded music divisions turned over a combined figure of $5.18 billion ($6.8 billion) in the six-month period.

Of this sum, around 34% – or $1.76 billion ($2.3 billion) – came from streaming and subscription services.

According to MBW, Universal Music turned over €1.832 billion (A$2.69 billion) in the first six months, giving it a 40% share of worldwide turnover.

Sony Music generated 190.89bn Yen ($2.4 billion) giving it a 35% share, with Warner Music with a US$1.3 billion ($1.7 billion) total and a 25% share.

The MBW report also looked at streaming revenue for the three majors. Collectively, the three reported $918 million ($1.2 billion) up 51% from the $607 million ($801 million) from the same period in 2015 (after a 45% growth from 2014), and represented $311 million ($410 million) of new digital money.

Breaking it down, in 2016’s first six months, Universal generated €653 million ($962.6 million) from streaming, which the report estimated to be 35.6% of its total revenue, and 42% of the global streaming revenue generated by the majors. (Recently figures from its parent Vivendi put streaming at 36% of UMG’s $2.07 billion or A$2.7 billion in recorded music revenue which works out to $4 million or A$5.2 million a day).

The figure for Sony was 63.05bn Yen ($798.9 million), or representing 33% of its finances, and 35% of global major label streaming.

Warner’s $430 million ($567. 6 million) was equivalent to 32%-33% of in-house income and a 24% global share.

MBW previously estimated that the three labels generate $10 million ($13.2 million) from streaming services (including YouTube) each day.

Other reports put the daily payment from Spotify, Apple Music, Tidal, Deezer, Rhapsody, and others collectively to nearly $1.6 million ($2.1 million) in guaranteed payments a day. Spotify, for instance, pays out 82% of its revenue in royalties. So the labels win even if streaming services don’t.

The revenue that the three majors made in the first six months of 2016 was almost equal to the $5.6 billion ($7.3 billion) that indie labels generated throughout 2015, according to a report this June from The Worldwide Independent Network (WIN). It put indies’ market share at 37.6% based on rights ownership. WIN acknowledges that generally the indies’ market share is cloudy because 52% of indies are distributed by major labels or use distributor owned by major labels, and their revenue and share are incorporated into the financial postings of the labels.