MIDIA RESEARCH
With Spotify leading the way in subscriber counts, the number of global music subscribers grew 11.6% to 818.3 million in 2024, according to MIDiA Research’s music subscribers market shares Q4 2024 report. That was about the same number of subscribers added in 2023, but where those new subscribers originated continues to change.
“The continued fast rise of the Global South is the market-defining dynamic, pointing to a rebalancing of the global music industry,” Mark Mulligan, managing director/senior music industry analyst, said in a statement. MIDiA Research defines the Global South as regions other than Europe and North America, where subscription penetration rates and prices are the highest in the world. “Revenues still skew heavily to the West but user growth is now consistently coming from elsewhere.”
Trending on Billboard
Nearly four out of every five new subscribers added in 2024 came from the mid-tier and emerging markets in the Global South, accounting for 78.4% of the 84.8 million new subscriptions last year and nearly three of five global subscribers overall. In turn, the mature streaming markets in Europe and North America represented 41.0% of global subscribers, down from 52.3% in 2020 and 62.0% in 2015.
The Global South has relatively small but fast-growing regions, often places where streaming has enabled a legal music ecosystem to thrive where little to none existed a decade or two ago. As Billboard reported last week, Mexico replaced Australia as the No. 10 market in 2024, according to the IFPI. The Middle East-North Africa region grew 22.8% while Sub-Sahara Africa improved 22.6%. China, the No. 5 market, grew revenues by 9.6%.
Spotify had a 32.2% share of global subscribers and finished 2024 with 236 million global subscribers, according to its latest earnings release. Spotify had more than double the No. 2 company, China’s Tencent Music Entertainment, which had a 14.7% share based on 121 million subscribers. Tencent Music Entertainment operates Kugou Music, Kuwo Music and QQ Music.
Apple Music was No. 3 at 11.6%, which works out to 95 million subscribers. YouTube Music and Amazon Music were tied for fourth at 10.1%,, or 83 million subscribers, each. Neither Apple Music, YouTube Music nor Amazon Music publicly releases their subscriber counts. YouTube’s latest number of 125 million subscribers announced on March 5 includes both YouTube Music and YouTube Premium, the ad-free tier of the video streaming service.
Apple Music and Amazon Music each lost nearly a percentage point of market share and added fewer subscribers than in the previous year. Of all globally available platforms, YouTube Music was the only major streaming service to post accelerated subscriber growth compared to 2023. That tracks to comments made last year by Universal Music Group CFO Boyd Muir. While Spotify, YouTube [Music] and some regional and local platforms showed “healthy growth,” Muir said during the company’s July 24 earnings call, some other, unnamed platforms “have seen a slowdown in new subscriber additions.”
China’s NetEase Cloud Music was No. 6 at 6.7%, which works out to approximately 55 million subscribers. Russia’s Yandex was No. 7 with a 5.0% share equal to 41 million subscribers. All others—including TIDAL, Qobuz, SoundCloud, Deezer, Napster and South Korea’s Melon—had a combined 9.5% share, which equals roughly 78 million subscribers.
Streaming remained the dominant force in the recorded music in 2024, but its impact dropped slightly.
For the first time, streaming’s share of total recorded music revenue did not increase from the previous year, according to MIDiA Research’s latest annual tally. In 2024, streaming accounted for 61.3% of total revenue, down from 62.4% in 2023.
Streaming revenue also had a slower rate of increase than in prior years, growing 6.2% compared to 10.3% in 2023 and 8.3% in 2022. And streaming drove less industry growth than in years past. In 2024, streaming accounted for 58.5% of annual revenue growth, down from 64.6% in 2023.
Platforms such as Spotify accounted for $22.2 billion of revenue last year and accounted for the lion’s share of the $36.2 billion of global revenue. That, too, marked a slowdown, as the 6.5% increase in total revenue was down from 9.7% in 2023 and 6.7% in 2022.
Trending on Billboard
As MIDiA Research succinctly put it: “The much anticipated streaming revenue deceleration—despite recent price increases—has now arrived.”
Price increase in 2023 by Spotify, YouTube Music, Amazon Music Unlimited and Apple Music helped fuel that year’s near-double-digit streaming gain. Spotify raised prices in the U.S. in 2024, too, and gave subscribers the option to opt into a less expensive, audiobook-free tier, although a Morgan Stanley survey found that just 17% of individual premium subscribers had done so last year.
Faced with the realities of market growth, the growth-minded record industry is looking to streaming services to continue raising prices and offer super-premium tiers at elevated prices for subsets of subscribers. In March, Universal Music Group chief digital officer Michael Nash stated the company is in talks with multiple streaming platforms about super-premium tiers. “We think this is going to be an important development for segmentation of the market,” he said.
The decline in streaming’s influence aren’t likely to be seen in other organizations’ annual figures because MIDiA Research’s global revenue estimates includes expanded rights such as merchandise, licensing and touring (as well as production music). In 2024, global expanded rights revenue reached $4.1 billion, up from $3.5 billion and $3.0 billion in 2023 and 2022, respectively. As a share of total revenue, expanded rights rose to 11.3% in 2024 from 10.0% in 2023 and 9.7% in 2022. If expanded rights are removed from the total figures, streaming’s share of revenue falls just barely to 69.2% in 2024 from 69.3% in 2023.
Elsewhere in the global industry, segments other than Universal Music Group and Warner Music Group gained market share in 2024.
UMG again had the largest market share with revenue of $10.5 billion, but the company’s percentage share of the global market fell one percentage point. Sony Music Group grew its market share to 21.7% and was the fastest-growing major label for the second consecutive year.
Artist direct revenue—which covers independent artists that use do-it-yourself distributors such as TuneCore, CD Baby and DistroKid—were $2.0 billion, and the 4.7% growth rate bested the 4.5% growth of 2023. The growth of the number of independent artists using these distributors grew three and a half times as fast as revenue.
Non-major labels increased their market share for the third straight year, improving to 29.7% in 2024 from 29.2% in 2023. Those non-majors had revenue of $10.7 billion, up 8.2% from the prior year. Non-majors’ streaming revenue increased 8.4% to $5.4 billion. Expanded rights income—companies such as HYBE and SM Entertainment in South Korea represent multiple aspects of their artists’ careers—grew to $1.6 billion, and 66% of that revenue came from four Asian record labels. Non-majors’ physical sales fell 6.4%, however.
From Taylor Swift T-shirts to Fleetwood Mac Rumours vinyl LPs, the global music merchandise business will grow to a retail value of $16.3 billion by 2030, according to a new report by MIDiA Research.
Merch become a priority for many artists in 2020 when the COVID-19 pandemic shut down the concert business. And as touring resumed and fans opened their wallets, the global merch business rose to $13.4 billion in 2023. But merch sales are expected to cool considerably, as MIDiA forecasts merch sales will grow at a compound annual growth rate (CAGR) of just 2.8% through the end of the decade. There’s still plenty of opportunity, though — if artists and merch companies don’t treat merch like a cash grab.
“As the market has become more sophisticated, fan expectations for quality have risen,” MIDiA’s Tatiana Cirisano said in a statement. “But record labels focusing on monetising fandom risk ‘overharvesting’ — exploiting this resource to the point of diminishing returns.”
Trending on Billboard
Music companies, Cirisano added, “must nurture deep, long-lasting fandom to sustain this growth.”
Physical music, which MIDiA considers to be merch because many consumers treat vinyl LPs and CDs as collectible items, is forecasted to peak in 2025 and decrease through 2030. Physical merchandise such as artist-branded apparel and digital merchandise such as virtual goods and NFTs are expected to make up for physical music’s decline and lift total merch revenues.
Merch isn’t the most financially appealing part of the music business. That would be digital music, which enjoys both higher margins and higher growth rates. In the first half of 2024, Universal Music Group’s recorded music business had earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 25.4%, nearly five times its merch division’s 5.3% EBITDA margin. And while MIDiA expects merch to grow at a 2.8% CAGR through 2030, Goldman Sachs forecasts the global music streaming market will grow at a 9.9% CAGR over that time frame.
But merch has always been an important part of the music business because of music fans’ unending desire for T-shirts and keepsakes of their favorite artists. Consolidation in the merch business began about six years ago as major labels and some indies invested in merchandising companies to diversify their revenues and expand the services they offer to artist clients.
Warner Music Group, for example, acquired German merch specialist EMP in 2018. Universal Music Group acquired boutique merch company Epic Rights in 2019. Sony Music Entertainment made a strategic investment in merchandise company Ceremony of Roses in 2022, and its Thread Shop merch agency purchased the merch division of The Araca Group in 2019. Also in 2019, Indie company EMPIRE took a majority stake in merch/ecommerce company Top Drawer Merch / Electric Family.
Connecting to listeners, not making money or signing to a major label, is the most important aspect of success for a musician, according to a new report titled “Sustainability from Chaos” by MIDiA Research and Amuse, a distribution and artist services company. Even if they reach only a small number of people, 89% of all creators surveyed and 94% of full-time professionals believe that success is defined by moving people with music.
Money matters, too, but relatively few artists say they strive to be superstars. Just 17% of creators and 21% of full-time musicians said being famous is critical to success, while 21% of both groups said signing to a record label is a sign of success. Still, 83% of full-time musicians — and 63% of all creators — defined success as making a career out of music.
The report is based on a survey of 450 artists conducted in April 2024 for MIDiA Research’s Creator Survey.
Trending on Billboard
It’s an important time to consider how artists define success. Artists have a wealth of options for releasing and financing their music. And there are far more independent artists than artists who have signed traditional record deals. MIDiA estimates that 95% of artists are “artist direct,” meaning they work with a distributor or artist services platform. Only 1% of artists are signed to a major label; the remainder are signed to indie labels.
The vastness of the independent artist market, and their desire for control over their careers, explains why companies are investing heavily in distribution and artist services. Universal Music Group has Virgin Music Group. Sony Music Entertainment has AWAL. Warner Music Group was interested in — but did not acquire — Believe, owner of TuneCore. Distributors such as STEM, UnitedMasters, Ditto and Symphonic have collectively raised hundreds of millions of dollars in funding in recent years.
For these service providers to succeed, they must provide artists with deeper, more meaningful connections with fans. According to MIDiA Research, the old definitions of success are being replaced by newer metrics of success such as community membership (such as Discord and WhatApp groups), sold-out shows and merchandise sales. According to the report, this approach “emphasizes building long-lasting relationships over merely accumulating views and followers.”
In the past, mainstream success was measured by chart position, radio play, awards and cover stories. Those achievements would give an artist a good chance at a sustainable career in music. But in the streaming era, those signals of mainstream success have been replaced by what the report called “misleading” metrics such as listens and follows. Chart position and radio play aren’t seen as meaningful indicators, according to the report, although they have marketing value.
Most full-time, professional artists want to work with a distributor with label services or a self-serve platform with tools that support artists to release their albums and tracks. In fact, these artists would rather work with a distributor (31%) than sign to an indie label (20%) and are nearly as interested in taking a do-it-yourself route (17%) or using a self-serve, online platform with artist tools (16%). Only 10% prefer using a management company to run their businesses, and only 6% prefer to sign with a major label.
Considering all creators — including both professional and part-time artists — a self-serve online platform is the preferred way to release albums and tracks (28%), followed by an indie label (25%), a distributor with label services (20%) and the do-it-yourself route (13%). A major label is preferred by just 7% of all creators. Management companies were the least preferred partner (6%).
Artists surveyed feel that breaking through the noise (54%) is the biggest challenge they face. Not having enough time to create (40%) and not having financial resources (35%) were the second- and third-biggest challenges cited by artists. That “noise” refers to the massive amount of music released every day online. In 2023, there was an average of 103,500 tracks uploaded daily to digital platforms, up 10.8% from 93,400 per day in 2022, according to Luminate’s Year-End Report 2023. Major labels accounted for just 3.9% of those tracks — as measured by new ISRC numbers — compared to 96.1% for the rest of the industry.
Building a sustainable career is made more difficult by the challenges of touring. Skyrocketing costs mean that live music is no longer the best way for artists to make money — but it’s still a goal for many artists and a path to financial comfort. In the report, MIDiA Research recommends that artist services companies provide stipends or salaries for new signings as well as tour support typically offered by record labels: “All artist services companies,” it writes, “need to take a longer-term view on artist relationships.”
In a presentation at the Music Biz conference in Nashville on Wednesday (May 17), MIDiA Research’s Tatiana Cirisano revealed the company’s predictions about the future of music streaming. Namely, the firm suspects that music streaming revenue growth, which has been in the double digits for years, will slow to the single digits, eventually cooling off from about 10% growth in 2024 to 3% growth in 2029.
“We’re in a crazy time for competing for consumer attention,” said Cirisano during the presentation, titled Where Does Streaming Go From Here? She noted that after the pandemic subsided, content providers of all kinds — from music to gaming to video — have had to accept that more traditional, in-person activities are absorbing large amounts of time for consumers once again. “The era of build it and they will come is starting to come to a close,” she continued. “You need to give people reasons to spend time on your platform.”
As part of the return to in-person experiences, MIDiA Research has found that background consumption of entertainment is on the rise, with 18.1 hours of background consumption in the first quarter of 2021 having escalated to 20.6 hours in the second quarter of 2022.
Traditional streaming services — Spotify, Apple Music, Amazon Music and other competitors — also face competition for users’ attention from “non-[digital service provider] streaming,” or platforms where music is part of the experience but not its sole focus, such as Peloton and TikTok. “We are starting to learn that non-DSP streaming is not just additive, it might actually also diminish the cultural capital of [traditional] streaming,” said Cirisano.
While the cultural capital of streaming reached a fever pitch as Spotify editorial playlists, like Rap Caviar and New Music Friday, became many listener’s go-to source for music suggestions, MIDiA’s data suggests that that “soft power” is starting to wane, giving way to sites like TikTok which promote what Cirisano called “lean-through” music consumption.
This can be a positive thing, she explained. While “lean back,” or background, consumption — such as pre-programmed playlists and radio play — is on the rise, young people are also more likely than ever to not just “lean forward” (meaning they program what music they listen to themselves) but to “lean through,” which Cirisano defined as creating social content, curating content and re-creating content with music. MIDiA has found that the average 16 to 19-year-old spends 3.7 hours per week creating content as of the fourth quarter of 2022. More than ever, young people want to be actively playful and interactive with their music, not just listen to static playlists on streaming — though that form of listening will still surely persist.
To Mark Mulligan, MIDiA’s founder, this is a repeat of history, said Cirisano. Prior to recorded music, live bands’ music would be impacted by the audience in front of them. Now, this has taken on a new form in the age of social media, AI and at-home recording technology, signaling a return to interactivity present throughout the long history of music — and marking a change in appetite from the “isolating” and “hyper-personalized” nature of today’s popular music streaming services. “This new generation wants to be more actively involved in music… I think you’re going to have an advantage if you’re an artist that is comfortable engaging with your fans,” said Cirisano.
MIDiA Research has also found that with the emergence of hyper-personalized algorithms on streaming and social platforms, listenership fragments significantly. This leads to superstars having less of an impact, making it harder for that class of artists to earn a fruitful living from just streaming alone. In tandem with creating content and forging brand partnerships, however, these bigger names can capitalize on their fandom. This atomization of the mainstream is also pushing DSPs to differentiate themselves by, for example, focusing on genre, like Apple Music Classical, or targeting audiophile listeners, like Tidal.
In the future, MIDiA’s data suggests that next-generation platforms will create three-sided marketplaces that operate as self-contained virtuous circles. Audiences will consume music, some fans in the audience will also create using the music, and that consumption and participation will signal the algorithm and distribute the music to new fans.
UPDATE: This story was updated May 17 at 7:59 p.m. ET to note that music streaming revenue growth — not music streaming subscription growth, as incorrectly stated in a previous version of the story — is expected to fall to 3% by 2029. It was also updated to note that background consumption of all entertainment, not just music, is on the rise.
-
Pages