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Recorded music grows 9%, but undervaluation persists, says IFPI
By Chris Cooke | Published on Wednesday 22 March 2023
The global record industry saw its revenues grow a further 9% last year to $26.2 billion according to the number crunchers at the International Federation Of The Phonographic Industry. Subscription streaming powered that growth of course, with revenues from premium streaming services up 10.3% to $12.7 billion.
According to the new stats pack from the IFPI, which aggregates recorded music facts and figures from across the world, premium streaming services now generate 48.3% of the sector’s income, with ad-funded platforms bringing in 18.7% of the money.
Physical discs are the next biggest revenue generator accounting for 17.5% of the cash, with 9.4% coming from the broadcast and performance of recorded music, 3.6% from downloads, and 2.4% from sync.
The physical music market actually saw more growth last year, up 4% to $4.6 billion. That’s all down to the vinyl revival. CD revenues dipped every so slightly while the revenues from the sale of vinyl records were up 17.1% across the year.
IFPI also breaks down revenues by region. Sub-Saharan Africa saw the fastest rate of growth at 34.7%, although in the wider scheme of things this region still brings in a small slice of global revenues. Latin America saw 25.9% in growth, the Middle East and North Africa 23.8% and Asia 15.4%. The US and Canada together scored 5% in growth, Europe 7.5% and Australia 8.1%.
In terms of individual countries, China saw another surge in revenues pushing it into the top five recorded music markets for the first time.
The top five most lucrative markets for recorded music have long been the US, Japan and then the big three European markets, UK, Germany and France. It’s France that has been pushed out of the top five by China. The rest of the top ten is made up of South Korea, Canada, Brazil and Australia.
So, there you go, lots of lovely stats for you. Though the IFPI’s ‘Global Music Report’ isn’t just about facts and figures. It also sets out the key concerns and lobbying priorities of the record industry and especially the major labels.
Which in turn tells us what things are currently bothering the big wigs at the major music companies, and what demands they are currently making of law-makers around the world and other stakeholders in the wider music business, especially on the digital side.
In fact, looking back at the messaging contained in the various stat packs put out over the last two decades by both the IFPI and the national record industry trade bodies is a good way of understanding the often traumatic journey the sector went on with the big shift from physical to digital, which involved ten years of decline and five years of stagnation before the streaming boom finally took things back into growth.
Across those two decades the record industry narrative slowly but steadily shifted as the market evolved, with the requests and demands along the way going a little bit like this (we’re paraphrasing ever so slightly, of course)…
1. Oh fuck, CD sales have just peaked. That’s not good. It’s the fucking file-sharers. We need to do something about the fucking file-sharers.
2. OK, guys, CD sales are now plummeting. Fuck, fuck, fuck. We really need to do something about the fucking file-sharers. We’re going to try suing everybody, but we really need those fucking law-makers to fucking do something about the fucking file-sharers.
3. Right, this iTunes thing Steve Jobs fucking forced on us all might just work. But only if we do something about the fucking file-sharers. We sued fucking everybody but that’s not working. And the fucking DRM technologies we were told would fuck over the fucking file-sharers just seem to be fucking everything up. Please somebody do something about the fucking file-sharers.
4. Thanks to the innovative partnership record labels have spearheaded with Apple and iTunes, the digital music market is now gaining momentum. Though we’re still fucked. Please, please, please do something about the fucking file-sharers.
5. This was a great year for the record industry as record labels innovated even further in building download experiences that are exciting music fans everywhere. But really we’re still fucked. Why haven’t we done anything about the fucking file-sharers? The fucking internet service providers should really do something about the fucking file-sharers.
6. The record industry has truly turned a corner as record labels continue to innovate in the digital market. By which, we mean, that fucking big advance cheque from Spotify was nice. Actually we’re still fucked. Can we hurry up and get these new fucking laws passed that force the fucking ISPs to actually fucking do something about the fucking file-sharers?
7. Thanks to the innovative partnerships record labels have spearheaded with subscription streaming services like Spotify our industry has well and truly turned a corner. Those file-sharers can still go fuck themselves, though. And the ISPs. Fucking ISPs.
8. This was a great year for the recorded music business which – thanks to the continued innovation of the record labels – is back in growth. No thanks to the fucking file-sharers. Or the fucking ISPs. Or fucking YouTube. We really need to do something about fucking YouTube.
9. This was another great year for the recorded music business which – thanks to the continued innovation of the record labels – continues to grow. But not fucking fast enough. Why? Fucking YouTube, that’s why. And the fucking safe harbour. Won’t somebody do something about the fucking safe harbour? If we start banging on endlessly about the ‘value gap’, will somebody do something about the fucking safe harbour? Fuck you, YouTube.
10. Thanks to the innovative partnerships record labels have spearheaded with a diverse mix of digital platforms like Spotify and YouTube, this was another year of significant growth for the record industry. Though the rest of the music industry is well and truly fucked because of this fucking pandemic, so we won’t brag too much about it, promise.
And that brings us to now. With market growth continuing, the pandemic over, YouTube onside and the file-sharers pretty much forgotten, what are the priorities of the record companies in 2023? Well, new digital platforms need to properly value music – especially the not really that new Facebook, Instagram and TikTok.
And over on those digital platforms that we sort of like, all the very fine music made by very fine humans and, crucially, released by very fine record labels needs to be prioritised over shitty background noise and machine-generated nonsense.
Or in the words of Universal Music’s boss Lucian Grainge, we need to make the world of digital music much more ‘artist-centric’. Which seems fair enough. Even if it’s still not clear what that means. Or whether any artists will actually be consulted on how streaming might be made more ‘artist-centric’.
“To succeed, music’s future must be artist-centric”, says Grainge in the new IFPI report. “As we enter our industry’s next exciting chapter, we must remain focused on our shared goal: a robust, growing and sustainable music ecosystem”.
“This is an environment in which great music is not drowned out by an ocean of noise”, he goes on, “where music is easily and clearly accessible for fans to discover and enjoy, and an environment in which the creators of all music content – whether in the form of audio or short-form video – are fairly compensated and can therefore thrive for decades to come”.
Sony Music boss Rob Stringer then declares: “Whilst we continue to bring high quality content into the world from hugely innovative creators, we must all recognise that the worth and importance of this creativity can be diminished if we don’t proactively maintain that value everywhere consumers experience content”.
“The recording industry represents the music that drives the growth and success of many other businesses”, he continues, “so we must be vigilant against any race to the bottom offered up to consumers. With new chapters on the horizon such as the Metaverse and AI, we will continue to protect our creators as we navigate a new complex rights model”.
“Music thrives at the intersection of culture, technology, and commerce”, reckons new Warner Music big cheese Robert Kyncl. “It’s the single most influential global art form, with an unmatched ability to attract audiences, drive social interaction, transcend borders, and unite people”.
“Despite this power, it’s still undervalued compared to other forms of entertainment”, he reckons on. “We’re excited to unlock the industry’s next phase of growth by championing extraordinary artists and songwriters, building long-term careers and loyal fan communities, while developing innovative business models and high impact tech products. Our future is a whole universe of opportunity”.
Meanwhile, IFPI CEO Frances Moore writes in her intro to the new report that “music continues to grow globally, and artists are increasingly interconnected with fans as a result of the worldwide infrastructure and investment from record companies”.
Lots of innovation and investment from record companies, she goes on, “has created new and diverse opportunities for artists to connect with their fans; from harnessing cutting edge technology – ranging from creating immersive music experiences to enhancing health and fitness activities – to reimagining opportunities to tell artist stories through films, TV and brand partnerships and much more”.
“However”, she then declares, “as the opportunities for music continue to expand, so too do the areas in which record companies must work to ensure that the value of the music artists are creating is recognised and returned. This challenge is becoming increasingly complex as a greater number of actors seek to benefit from music whilst playing no part in investing in and developing it”.
Though, not wishing to end of a negative note, she concludes: “Ultimately, however, the story of this report is one of innovation and growth and, above all else, great artists and their music”. And hurrah for that.
Get yourself some stats and other IFPI gubbins here.
