With the advent of the Internet, the music market has been forced to change rapidly. Recordings on media, audio cassettes and disks, are no longer sold in the same volumes, and music labels have had to adapt to the new digital listening format and cooperate with streaming services to continue making money.
As recent studies show, the music industry has successfully adapted to modern realities and continues to grow. Finam.ru tells what is happening to the music market and what the future holds.
Music revenues hit a record high
According to the International Federation of the Phonographic Industry (IFPI) Music Report, global music sales grew for the ninth consecutive year in 2023, with recorded music revenues increasing in every market and region and in virtually all formats.
Total music revenues grew to $28.6 billion, up 10% from the previous year. This is the second highest growth rate ever, following an 18.5% jump in 2021.
Total sales in 2023 became the largest since 1999, when IFPI first began collecting data on global music revenues, and sales amounted to $22.2 billion. Since then, the market has managed to hit a bottom of $13 billion in 2014 due to piracy and declining sales.
According to MIDiA Research, the global revenue from recorded music in 2023 was even higher - $35.1 billion. The point is that in its calculations the company also took into account the expanded revenues of labels from music rights, for example, from multi-legal recording contracts. Thus, MIDiA data turned out to be more complete and 23% more than $28.6 billion from IFPI.
Streaming services and media sales are growing
This growth last year was made possible by an 11.2% increase in revenue from paid streaming subscriptions, which totaled $14 billion, up from $12.7 billion in 2022. The total number of paid music streaming subscriptions surpassed 500 million for the first time, accounting for 48% of music market revenue.
The growth in global paid streaming revenues comes after many leading streaming services, including Spotify, Apple Music, Amazon Music, YouTube Music and Deezer, raised subscription prices in key markets over the past 12-18 months. For most streaming services, these price increases were the first since launching more than a decade ago.
According to IFPI, if sharing and family accounts are included, there are now more than 667 million users of paid subscription accounts worldwide, up 13% from the 589 million recorded in the previous 12 months.
Total streaming revenue, which includes paid subscriptions and ad-supported tiers, grew 10% to $19.3 billion, accounting for 67% of global recorded music sales, roughly the same market share as last year.
Overall, streaming's annual growth continues to slow due to its already high penetration of the global music market.
IFPI estimates that media record sales and performance rights revenues also saw strong growth globally in 2023. Combined revenues from CD and vinyl sales grew for three consecutive years to reach $5.1 billion, a 13% increase from 2022. Meanwhile, Asia brought in nearly half (49%) of all revenues globally.
What is in the future for the music market?
Experts agree that the future growth of the music market will largely depend on streaming as well as stock music. According to a study by Technavio, the stock music market is experiencing significant growth due to the increasing demand for background music in various fields. Stock tracks are widely used in TV shows, corporate videos, commercials, websites, and YouTube videos.
According to Technavio analysts, stock music is also used to voice-over advertisements to set the mood and context to promote products or services. The wide availability and variety of stock music cater to various needs, driving the growth of the market. Meanwhile, stock music tracks are instantly recognizable and do not require special permission or additional clearance fees. They are licensed alternatives to production tracks.
Technavio experts forecast the global stock music market to grow at a CAGR of $650.4 million from 2024 to 2028. The market is expected to grow at a compound annual growth rate of 8.09% during the forecast period. Technavio analysts name North America as the most promising and sustainable region for the development of the music industry.
