Business News Digital Labels & Publishers The Great Escape 2015

How the global music market is changing

By | Published on Friday 15 May 2015

IFPI TGE 2015 presentation

As part of the ‘Music Licensing: Explained At Last!’ strand at CMU Insights @ The Great Escape, the IFPI’s Alex Jacob presented a guide to the organisation’s global music industry figures for 2014.

Here are five interesting points we took away from his presentation:

1. The enduring physical market

In 2014, digital revenues matched physical sales globally for the first time, increasing by 6.9%, driven by subscription revenues (+39%) and ad-supported revenues (+38.6%). However, physical remains the dominant format for music in a number of markets:
Japan (78%)
Poland (71%)
Germany (70%)
Austria (65%)
South Africa (62%)
France (57%)

2. The vinyl revival?

The growth in sales of vinyl has been a big topic in the music industry and the media in the last few years, with revenues increasing 54.7% last year. However, it remains a niche product, making up just 2% of the global market.

3. The changing digital market

Download sales declined by 8% in 2014, compared to a 2% fall in 2013. They still account for 52% of digital revenues. However, streaming revenues have overtaken download sales in 37 markets.

Music subscription services are now worth $1.57 billion, some 23% of the global digital market.

Ad-supported streaming services revenue growth accelerated from 16.6% in 2013 to 38.6% in 2014 and are worth $641 million.

4. Emerging markets to watch

For the last 30 years, the industry made 80% of its revenues in ten countries…┬áthat is set to change.

Brazil (+2%) and South Korea (+19.2%) are both top ten global markets. The industry believes China, India and Russia have the potential to be top ten markets in the future.

And there is strong digital growth in many smaller markets such as Argentina (67.7%), Colombia (+94.9%), Indonesia (+129%), Peru (+96.5%), South Africa (+61.5%) and Venezuela (+272.8%)

5. The future

The recording industry has stabilised after years of decline, but still has to achieve sustainable growth. Record companies have transformed their business models and offer music in a portfolio of formats. We are still in the early stages of building a mass market around music subscription and streaming. The industry’s revenue base is coming from a wider pool of countries as digital helps light up new markets.

Read more coverage of CMU Insights @ The Great Escape on our special microsite here.