Global recorded music market clocks highest revenue rise in 20 years
The drought is definitely over. The global recorded music market is back on the rise – but industry leaders caution against complacency, saying there’s still a fight to be won over piracy, the YouTube “value gap”, and the perception that a recovered sector looks anything like the market’s peak at the end of the last century.
Senior digital executives from the three major labels and the chair of IFPI – the world’s peak body for recorded music – spoke to a small number of outlets globally, including TMN, on Tuesday night to spruik the IFPI’s annual report. The IFPI Global Music Report 2017, released overnight, showed that after its first upswing of 3.2% in 2015, the industry had a further 5.9% rise in 2016.
The global recorded music market was worth US$15.7 billion in 2016, from $14.8 billion the year before.
The London-based International Federation of Phonographic Industries said the 5.9% rise was the highest since it began tracking the market in 1997.
Digital income grew 17.7% to account for 50% of global revenues for the first time.
Between 1999 and 2014, the world sector lost nearly 40% of its revenue – a slide from $23.8 billion to $14.3 billion three years ago.
But now, 112 million users of paid streaming subscription services (as of December 2016) has driven streaming revenue up by 60.4%. It more than offset the 20.5% decline in downloads and a 7.6% decline in physical revenue.
According to the report, 14% of revenue came from performance rights and 2% from synchronisation.
Streaming also helped drive growth in emerging markets, with China (+20.3%), India (+26.2%) and Mexico (+23.6%) experiencing significant revenue growth.
The IFPI emphasised that the global growth was only due to investment by record companies – not only in artists, but also in the systems supporting digital platforms, which has allowed for the licensing of over 40 million tracks across hundreds of services.
- Australia was included in the Asia & Australasia region, which en bloc saw a 5.1% growth. The region saw a 45.6% rise in streaming income, offsetting a 9.4% decline in digital downloads and contributing to an 18.7% rise in digital revenue. Physical formats had a 1.8% decline.
- Japan’s market is the largest in our region, and second largest in the world. It grew by 1.1%, with digital growth registering 12.6%, which offset a 1.3% decline in CD sales.
- The United States, the largest music market in the world, saw its recorded music revenues up 7.9%, a leap from its 1.5% expansion in 2015. Digital revenue grew 16.6% while physical plunged 17.1%, while streaming revenue leaped 84.1%.
- For the seventh consecutive year, Latin America had the highest level of revenue growth, last year up a further 12% overall and 31.2% in digital.
- Europe’s market grew 4%, after growing 3.7% in 2015.
But IFPI Chief Executive Frances Moore warned, “Music’s potential is limitless, but for this growth to become sustainable – for investment in artists to be maintained and for the market to continue to evolve and develop – more must be done to safeguard the value of music and to reward creativity.”
The fight against piracy continues. Last year record companies around the world identified 19.2 million sites hosted infringing content, and issued 339 million requests to Google requiring it to ‘delist’ infringing sites.
Drake was the biggest selling artist in the world last year. He was followed by David Bowie, then Coldplay, Adele, Justin Bieber, Twenty One Pilots, Beyonce, Rihanna, Prince and The Weeknd at tenth spot.
Beyonce had the biggest selling album of 2016, with Lemonade moving 2.6 million; Drake’sOne Dance was the #1 single. The album chart did not take streaming into account, but the singles counted both sales and sale-equivalent streams.
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