Music Revenues Climb 10% to $28.6 Billion

Global music sales grew for the ninth consecutive year in 2023, with recorded music revenues increasing in every market and region, and across almost all formats, according to the International Federation of the Phonographic Industry’s (IFPI) Global Music Report 2024.

Total revenues climbed to $28.6 billion, a rise of just over 10% on the previous year, and the second highest growth rate on record after 2021’s 18.5% year-on-year spike.

2023’s total sales figure is the highest level since 1999 — when IFPI first started compiling global music revenues and sales totaled $22.2 billion — on an absolute dollar basis, not accounting for inflation. Piracy and declining physical sales saw the market bottom out at $13 billion in 2014.

Driving last year’s growth was an 11.2% rise in paid streaming subscription revenue, which totaled $14 billion, up from $12.7 billion in 2022, and accounted for almost half (48.9%) of global music sales.

The rise in global paid streaming revenue comes after many of the leading streaming services, including Spotify, Apple Music, Amazon Music, YouTube Music and Deezer, all raised their subscription prices in key territories over the past 12-18 months. For the majority of streaming services, the hikes were their first price rises since launching more than a decade ago.

Despite the rising cost for consumers, the number of music streaming subscribers continues to grow globally, with IFPI reporting that the number of paid subscriptions to streaming services surpassed 500 million for the first time in 2023.

When shared usership and family accounts are considered, there are now more than 667 million users of paid subscription accounts globally, says the London-based organization, up 13% from the 589 million recorded in the previous 12 months.

Total streaming revenues, comprising of paid subscription and advertising-supported tiers, rose 10% to $19.3 billion to make up 67% of worldwide recorded music sales, roughly flat with last year’s share of the market.

Nevertheless, streaming’s year-on-year growth continues to slow as a result of its already high penetration of the global music market. In 2021, total streaming revenues spiked 24% year-on-year. In 2022, the rate of growth had more than halved to 11.5%.

Sales Up Across (Nearly) All Formats

Although streaming continues to dominate global music revenues, 2023 also saw strong gains in physical record sales and performance rights revenues. Combined CD and vinyl revenues grew for a third consecutive year to $5.1 billion, up 13% on 2022’s total, with Asia generating almost half (49%) of all physical revenues worldwide.

IFPI attributed the region’s continued dominance of the physical market to strong sales of K-pop acts such as boyband Seventeen, who topped IFPI’s 2023 global album charts with FML and also had the year’s eighth best-selling album with follow-up set SEVENTEENTH HEAVEN.

In terms of market share, physical accounted for just under 18% of the overall market last year, marginally up from 17.5% in 2022 but still down on 2021’s share.

Performance rights revenue, meanwhile, climbed 9.5% to $2.7 billion, representing 9.5% of global revenues, while sync income was up 4.7% to $632 Million, representing 2.2%.

The only formats to record a decline in 2023 were digital downloads and what IFPI classifies as other (non-streaming) digital formats, which fell by 2.6% to $900 million, representing just 3.2% of the global market.

“The figures in this year’s report reflect a truly global and diverse industry,” said IFPI chief financial officer and interim joint head John Nolan in a statement accompanying the report.

Nolan said the strong rise in paid streaming subscribers worldwide, as well as services’ price increases, contributed “significantly” to overall revenue growth. He also said the music industry’s recovery from its lows of a decade ago wouldn’t have been possible without “record companies’ sustained investment in artists and their careers.”

According to IFPI figures, record companies invest $7.1 billion each year globally in A&R and marketing alone. They are also paying out more money than ever before to artists, said IFPI, with label payments to musicians increasing by 96% between 2016 and 2021, versus a 63% rise in record company revenues.

No Change in the Global Top 10 Music Markets, With U.S. Still On Top

In terms of world markets, IFPI said that music revenues were up in all of the 58 markets it tracks, with the U.S. retaining its long-held No. 1 position with music sales growing 7.2%, compared to 4.8% growth last year.

Japan holds steady in second place with sales growing 7.6% in 2023. The third and fourth-biggest markets for recorded music remain the United Kingdom (+8.1%) and Germany (+7%), respectively.

The rest of the top 10 is made up of China (+25.9%), representing the fastest rate of increase in any top 10 market, followed by France (+4.4%), South Korea (percentage not provided), Canada (+12.2%), Brazil (+13.4%) and Australia (+11.3%). (IFPI’s free-to-access report does not provide market-by-market revenue breakdowns).

Those cross-market gains are mirrored on a regional basis with revenues from the U.S. and Canada region up 7.4%.

Combined, the U.S. and Canada region accounts for almost 41% of global recorded music revenues, reports IFPI, while Latin America — where streaming makes up 86% of the market — saw growth of 19.4%, far outpacing the global growth rate and representing the 14th consecutive year of revenue growth in the region.

Europe remains the second-biggest region for music sales, accounting for more than a quarter (28%) of global revenues and growing 8.9% year-on-year. In third place is Asia, where revenues rose by almost 15% in 2023, driven by strong gains in physical and digital sales.

Once again, the fastest-growing market region was Sub-Saharan Africa, which recorded a 25% rise in music sales, largely driven by increased take up of paid subscription services (up by just under a quarter) and the thriving South African music market, which grew by almost a fifth and contributed more than three quarters of the region’s revenue.

Revenues in the Middle East and North Africa, where streaming holds a 98% share of the recorded music market, rose by almost 15%.

(IFPI uses current exchange rates when compiling its Global Music Report, restating all historic local currency values on an annual basis. Market values therefore vary retrospectively as a result of foreign currency movements, says IFPI, which represents more than 8,000 record company members worldwide, including all three major labels, Universal Music Group, Sony Music Entertainment and Warner Music Group.)

Transformation Underway

Present at the Global Music report’s launch in central London were senior executives from all three major labels, as well as Konrad von Löhneysen, founder and director of Germany-based independent Embassy Of Music. Leila Oliveira, president of Warner Music Brazil, also participated in the event via video call from Rio.

Reflecting current industry trends, the potential impact of artificial intelligence (AI) on the record business, and particularly risks around generative AI, was a key topic of conversation among the speakers.

“The reality is that we’re at the beginning stages of another transformational event for the music industry,” said Dennis Kooker, president of global digital business at Sony Music Entertainment.

“While I’m enthusiastic about where the evolution will lead, it is essential that we find new products and new business models around these technologies to ensure the future of human creativity can be invested in, and that creators can be rewarded,” Kooker said.

He subsequently warned: “We must also fight the position that too many companies want to take to ignore copyright and intellectual property rights, and use our content without permission or without proper compensation.”

Adam Granite, executive vp of market development at Universal Music Group, said that while AI used “in the service of artists is wonderful,” AI that uses musicians’ work “without authorization and compensation is not.”

“We believe it’s perfectly possible to develop and adopt AI technology while also ensuring artists rights are protected,” said Granite, citing UMG’s recent partnerships with Roland Corporation and YouTube on AI initiatives as industry-led developments that give “artists a seat at the table and will help safeguard their rights” as more AI products enter the music business.

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