State Champ Radio IFPI Global Report
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.
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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 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.
LONDON — An eighth consecutive year of growth is undoubtedly great news for the music business — especially for anyone who worked in the industry during the near-decade of decline brought on by rampant piracy and falling CD sales. But this year’s IFPI “Global Music Report” also demonstrates a slowing rate of growth across all formats and in nearly all established markets.
Here are five takeaways from this year’s report:
Growth Slows Down
Total recorded music revenues climbed to $26.2 billion, up 9% in 2022, which, although impressive, is half of 2021’s growth, when revenues were up 18.5%. Paid-for streaming subscription revenue rose 10.3% to $12.7 billion in 2022, compared with a 21.9% year-on-year jump in 2021.
Total streaming (including paid subscription and advertising-supported) was up 11.5% to $17.5 billion, versus a rise of 24% the prior year.
Physical format revenue climbed 4%, compared to 16% in 2021, while music sales in the world’s three biggest markets — the United States, Japan and United Kingdom — all grew by around 5% last year, compared with double-digit gains for the U.S. and U.K. in 2021 (+22.6% and +13.2% respectively) and a rise of 9.3% in Japan.
IFPI attributed the slowing to 2021’s exceptional growth, which it said was partly fueled by a post-pandemic bounce back in music consumption, and execs at a London launch event Tuesday said they were confident the market was not about to plateau.
“I do think there are pockets of established markets where there is an opportunity to grow,” said Simon Robson, head of Warner Music Group’s international recorded music operations outside the U.S. and the U.K. He cited France as a major music market where streaming subscription penetration rates remain under 20%. “The challenge for today is how we better monetize other forms of music consumption,” he added, noting that “it would help if music subscription pricing could reflect the realities of inflation, which, as we’ve seen with video streaming services, have been putting up their prices quite significantly.”
When Robots Take Over
The future role that artificial intelligence (AI) will play in the record business was raised several times at the London launch event, with executives keen to highlight the technology’s potential for commercial growth, as well as some of the risks and challenges it brings. Some executives saw potential benefits in using AI to better analyze and understand fan engagement trends and artist discovery (something which platforms and music companies are already doing) and optimizing technical aspects of music production, including immersive sound.
On the flip side, execs issued a stark warning about human artistry being devalued at the expense of technology. AI developers, they said, could fail to respect the rights of creators by using artist recordings to generate new content without authorization – a threat that Michael Nash, executive vp, chief digital officer at Universal Music Group, said he placed “at the top” of industry issues that need to be addressed. “We need to work very hard to define new models so that we can enable generative AI without looking away from what is essentially going to be wholesale hijacking of the intellectual property of the entire creative community,” wrote Nash in IFPI’s “Global Music Report” document.
Streaming May Dominate, But Physical Is Far From Dead
Having enjoyed a post-pandemic renaissance in 2021 — when sales of CDs increased for the first time this millennium and overall physical sales grew 16.1% — physical format revenue continued to be surprisingly resilient last year, rising 4% to $4.6 billion. It was the second consecutive year of growth for the format, once considered dead. Almost half (49.8%) of those global revenues came from Asia, where the humble CD remains a popular music purchase, particularly in South Korea and Japan, the region’s largest music market and world’s second biggest behind the U.S.
Vinyl revenues’ upward trajectory also continued, rising 17.1% over 2021, and while global CD sales slipped 0.4% year-on-year (IFPI didn’t provide financial values for CD or vinyl income), physical revenues still accounted for 17.5% of the overall recorded music market last year. That’s just under what ad-supported streams generate for labels and rights holders (representing 18.7% of global sales) and more than the combined haul from sync, performance rights and digital downloads.
All Eyes Turn Towards Africa
Sub-Saharan Africa overtook the Middle East and North Africa as the fastest growing region in 2022, with music sales rising almost 35% year-over-year, reports IFPI. Driving that growth was South Africa’s thriving music industry, Africa’s biggest market, which climbed by more than 31% last year, compared to modest 2.4% growth in 2021.
Nevertheless, the challenge of converting users of ad-based music services to paid subscription remains a considerable one, said Temi Adeniji, president of Warner Music Africa, with South Africa having around 4 million paid subscribers out of a population of nearly 50 million people. Adeniji said the burgeoning global popularity of Amapiano, a genre which originated in South Africa, was already producing crossover hits in markets like Nigeria. She predicts “an infusion of Amapiano elements” into other international music scenes over the next few years to further drive the region’s development as a key music territory.
China Climbs to Become a Top-Five Music Power
For years, music executives have talked up China — the world’s most populous country, home to 1.4 billion people, according to China’s National Bureau of Statistics – as a huge music market in waiting. In 2022, that potential was finally realized with China usurping France (a long-time mainstay in the upper echelons of the world music market rankings) as the fifth-biggest music market worldwide with revenues of $1.2 billion, up 28.4% year-on-year, according to IFPI. That’s on the back of 30% growth in 2021, when China was the world’s sixth-biggest music market.
The dominance of local streaming services QQ Music, Kugou Music, Kuwo Music, which are all owned by China-based Tencent Music Entertainment (TME, which publishes Billboard China), means that Western and international acts rarely feature on China’s many of domestic charts, which includes some run by China’s state-owned broadcaster. But the popularity of domestic pop stars like Jay Chou, Yisa Yu, Mao Buyi, Zhou Shen and Jackson Wang is now rapidly driving subscription take up in a country rife with piracy on a decade ago. TME’s most recent company filings report 85.3 million paying music users as of the third quarter of 2022.
Global music sales rose for the eighth consecutive year in 2022, with recorded music revenues growing in every world market and across almost all formats, according to the International Federation of the Phonographic Industry’s (IFPI) “Global Music Report 2023.”
Total revenues climbed to $26.2 billion, a rise of 9% on the previous year. Although that rate of growth is half 2021 year’s rise, when revenues were up 18.5% year-on-year, IFPI said it was still the fourth highest growth level the recorded music business has seen this millennium.
The leading driver of growth was a 10.3% rise in paid-for streaming subscription revenue, which totaled $12.7 billion last year. IFPI reports there were 589 million users of paid subscription accounts at the end of 2022, up from 523 million in the previous 12 months and 443 million in 2020.
Streaming (including paid subscription and advertising-supported) now accounts for 67% of sales across the music industry, up from 65% in 2021 and 62% in 2020, although rate of growth is slowing.
In 2021, streaming revenues rocketed 24% to $16.9 billion. Last year, total revenues streaming revenues increased 11.5% to $17.5 billion.
Despite the dominance of streaming, physical music formats continue to be resilient with CD and vinyl revenues increasing for a second consecutive year — albeit at a slower rate than 2021’s 16.1% rise, fueled by a post-pandemic boom in home music purchases — to $4.6 billion, up 4% on the prior year.
Within physical music revenues, last year’s growth in CD sales proved to be a fleeting uplift with revenues falling 0.4% in 2022. Vinyl revenues shot up 17.1% (IFPI did not provide revenue numbers for CD or vinyl sales).
In terms of market share, physical accounted for 17.5% of the overall market last year (down from 19.2% in 2021) with Asia generating almost half (49.8%) of all global revenues for physical music sales.
Performance rights revenue climbed 8.6% to $2.5 billion, representing 9.4% of global revenues, while sync income was up 22.3% to $0.6 billion, representing 2.4%.
Downloads and what IFPI classifies as other (non-streaming) digital formats was once again the only format channel to record a decline, falling 11.7% to $900 million and representing just 3.6% of the global market.
As per previous year’s reports, 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.
Thanks to sustained growth in streaming, global recorded music revenues have now reached their highest level since 1999 — when music sales totaled $22.3 billion – on an absolute dollar basis, not accounting for inflation, reports IFPI. Piracy and declining physical sales saw the market bottom out at $13.1 billion in 2014.
“Record companies’ investment and innovation has helped make music even more globally interconnected than ever,” said IFPI chief executive Frances Moore in a statement, accompanying the report.
As the music economy grows, however, “so too do the areas in which record companies must work to ensure that the value of the music artists are creating is recognized and returned,” Moore warned.
Referring to the ongoing threat of music piracy, she said the challenges for record companies, artists and creators are “becoming increasingly complex as a greater number of actors seek to benefit from music whilst playing no part in investing in and developing it.”
Writing in the report’s foreword, Universal Music Group chairman and CEO Sir Lucian Grainge said “to succeed, music’s future must be artist-centric.” He called on the industry to focus on building a “robust, growing and sustainable music ecosystem” in which “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.”
IFPI’s Global Music Report 2023 Topline Figures:
Global music sales up 9% to $26.2 billion
Streaming subscription revenues up 10.3% to $12.7 billion
Total streaming revenues (including paid and ad-supported) up 11.5% to $17.5 billion
Physical revenues up 4% to $4.6 billion
Performance rights revenues rise 8.6% to $2.5 billion
589 million paid music subscribers
Streaming’s share of global music sales: 67%
In terms of world markets, the U.S. retains its number one position with music sales growing 4.8% and exceeding $10 billion in recorded music sales for the first time.
Japan holds steady in second place with sales growing 5.4% in 2022. The third and fourth-biggest markets for recorded music remain the United Kingdom (+5.4%) and Germany (+2.2%), respectively.
The rest of the top 10 is made up of China (+28.4%), which becomes a top five global market for the first time, France (+7.7%), South Korea, Canada (+8.1%), Brazil (+15.4%) and Australia (+8.1%).
IFPI said that music sales were up in all 62 of the global markets it tracks. The organization’s free-to-access report does not provide market-by-market revenue breakdowns.
On a regional basis, it was a similar story with revenues from the U.S. and Canada region up 5%, while Latin America – where streaming now accounts for 85.2% of the market — saw growth of 25.9%
The fastest-growing market region in 2022 was Sub-Saharan Africa, which recorded a 34.7% rise in music sales, largely driven by the booming music market in South Africa, where sales were up by more than 30% year-on-year.
Revenues in Middle East and North Africa, last year’s fastest growing region, rose by almost 24%, driven almost entirely by streaming, which has 95.5% share of the region’s recorded music market – the highest share for any region worldwide, reports IFPI.
Revenues in Europe, the second-largest recorded music region in the world after the U.S. and Canada, grew by 7.5% — compared to the prior year’s growth rate of 15.4% — driven by gains in Europe’s three biggest markets, the U.K., Germany and France. Asia grew by 15.4%.
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