Fans still value the unique experience of seeing their favorite artist in concert enough to pay for it. However, the overall effect of this niche market on revenue is negligible –, In addition to digital and physical revenue streams, income from broadcast, online radio, and live performances – collectively called Performance Rights –. Streaming continued to be the dominant channel, reaching 50M subscribers and representing 75% of industry revenues. The Recording Industry Association of America states that the industry grew by 11.4% in 2016 reaching $7.7 billion. The music industry still has time to figure out its next act. Digital sales – such as music streaming services and track downloads – now account for 45% of total global music revenue, compared to 39% for physical sales. A graduate of the University of Southern California, he studied cognitive science and music industry. Although we’re talking fractions of pennies per stream, with the increased use of such services the revenue from streaming can at the very least displace lost payments from say, the decline of individual song downloads, as one study showed. The ranking is based on retail value (rather than units) each market generates respectively per year; retail value generated by each market varies from year to year. The headline figure: global recorded music revenues grew by 8.2% to $20.2bn in 2019, fuelled by streaming, which for the first time accounted for more than half of the total. Years ago MP3 players and iTunes all but destroyed the traditional album, and more recently even permanent digital downloads began to see a dip in sales, down as much as 13% in 2013-2014. RIAA 2018 YEAR-END MUSIC INDUSTRY REVENUE REPORT In 2018, revenues from recorded music in the United States grew 12% to $9.8 billion at estimated retail value. . In the face of these changes, record label executives have redoubled their efforts to protect their artists and utilize whatever means possible to bring music to an expanding audience, proactively licensing music and creatively engaging with streaming and downloading opportunities for musicians. According to the Recording Industry Association of America, over 70,000 different albums were released by the middle of … Taylor Swift is just one artist who famously removed her music from streaming sites because she claimed streaming services were hurting the industry. We use cookies to understand how you use our site and to improve your experience. The Artist Revenue Streams site is powered by Wordpress. © 2020 Forbes Media LLC. Nearly a billion listeners use free ad-supported services like YouTube or Spotify and Pandora’s free versions, generating only about half a billion dollars for industry. Every year, we hear about revenue numbers as well as growth in streaming and vinyl sales, but other stats, like the number of active musicians in North America, are tougher to nail down. All other channels have been declining, especially digital […] Music industry body the International Federation of the Phonographic Industry (IFPI) said revenue from paid subscriptions accounted for 37% of global music revenues last year. For example, Spotify, which boasts some 35 million songs available for listen, or SoundCloud and YouTube with their abundance of remixes, covers, and unique content, provide listeners an on-demand and sometimes pleasantly unpredictable experience that ones’ own fixed music library cannot. Musicians in the US received just 12% of the revenues their music generated in 2017, according to a report, though that figure is an improvement on the 7% they received in 2000. No one wonders about that anymore; instead, we wonder how much further streaming can grow. We can therefore use this number to estimate that the average music streaming subscriber in 2018 ($6.83bn / 255m subs) was paying $26.78 a year, or $2.23 per month. As this chart shows, the "hockey stick" growth year for interactive streaming was 2016, when revenues more than doubled over 2015. Employment in the UK music industry was a record 197,168 at the end of 2019. If these trends continue, we should see the upper limits of the music industry's new growth engine within the next couple of years, and the U.S. recorded music industry will end up somewhere in the $12 billion range, somewhat below its $14.6 billion peak from 1999, especially when adjusted for inflation. This uptick in revenue puts the total industry revenue in 2015 at $15 billion, a 3.2% increase – the highest year-to-year growth in almost 20 years, according to a report out by IFPI. How can an artist profit from the rapidly evolving ways that fans consume music? The world's largest recorded music markets are listed annually by the International Federation of the Phonographic Industry (IFPI). The record industry has seen a lot of change over the years. Under a more conservative approach, however, only a fraction of radio revenue will be included in the music industry in the form of royalty payments. According to IFPI Global Music Report 2016,the industry generated $4.898 billion in 2015 and was ranked the largest music industry in the world. Interactive streaming, through services like YouTube, Spotify, Apple Music and Amazon Music Unlimited, is now dominating the industry even more than before. Revenue from those services is now 63% of overall industry revenue, and total subscribership has topped the 50 million mark. This includes ticket… Read More The RIAA released its semiannual compilation of recorded music revenues this week. Notably, streaming in particular is on the rise. Source: RIAA. Meanwhile, paid downloads and CDs are continuing their slides into irrelevance. With wider availability of smartphones and increased connectivity via the Internet, the industry worldwide has witnessed an influx of high-quality streaming services, like the aforementioned Spotify as well as Apple Music and Jay-Z’s Tidal, to name a few. Global music industry revenues totaled roughly $15 billion in 2015, while the live music equivalent totaled nearly double, at $29 billion. The indu… This raises the question of where recorded music will go next. You may opt-out by. On the one hand, apart from some nascent ideas around the smart speaker market, we have very little idea of that right now. – draws big numbers of listeners which can mean big rewards to artists. But because live music is ramping up so fast, record labels have devised a way to get a cut of this revenue stream by brokering what are called “360 deals.” With this kind of deal the label profits from live as well as recorded music. Published by Amy Watson, Nov 13, 2020 According to a 2020 study exploring the global music industry, worldwide live music sponsorship revenues will … Instead, revenue generally refers to recorded music and its usages: downloads, streams, CDs, and/or songs played on the radio or in TV ads. So, it appears the music industry is finally seeing a change for the positive. Despite more traditional formats being down, streaming is up and its potential suggests good things for artists as well as the industry as a whole. Total revenues grew 18% to $5.4 billion at retail in the first half of 2019. Taylor Swift is just one artist who famously removed her music from streaming sites because she claimed streaming services were hurting the industry. Thomas Honeyman is a musician, music blogger, songwriter, and entrepreneur in Los Angeles, CA. As more listeners have access to smartphones, tablets, and other devices for listening — and as the technology improves, becomes more desirable, and more widely available globally – streaming, it seems, will continue to be the way forward for the industry. Streaming music accounted for 80% of industry revenues. In part this can be explained by the music industry’s success at adapting to the rapidly changing digital age. But while the methods of consuming music are evolving, one thing that has not changed is a fan’s desire to see her favorite artist perform live. That’s compared to the nearly $2 billion contributed by paid subscribers who number around 68 million at present. By the time revenue from one era flattens and begins to decline, the industry has some idea of where the next wave of revenue is going to come from. In total, UK music fans spent £1.41bn ($1.80bn) on recorded music across all formats in 2019, up 7.1% on the previous year (2018)’s haul of £1.32bn. Chinese Music Industry Revenue by Source, 2017 Sources: IFPI, CAVCA, MCSC, The Daolu Cultural Industry Research Center. Future of Music Coalition | 2217 14th Street NW, 2nd floor, Washington, DC 20009 | (202) 822-2051. As all financial data is given in US dollars annual rates of change for all countries other than the United States are heavily influenced by exchange ratefluctuations as well as by actual changes in revenue in local curr… And the 2018 numbers give us a somewhat ominous clue: The growth of paid-subscription interactive streaming revenue is clearly slowing down. I am the founder of GiantSteps Media Technology Strategies, a consulting firm whose clients include content providers and digital media technology companies ranging from. The UK music industry contributed £5.2 billion to the UK economy in 2018. That makes for a revenue of $4.3 billion, according to research conducted by the group, which represents approximately 80 percent of the music industry’s overall revenue. The industry’s global paid streaming revenue haul was up 24.1% year-on-year, says IFPI – suggesting that it grew from approximately $6.83bn in 2018 to $8.48bn in 2019. President, GiantSteps Media Technology Strategies, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation with Forbes Insights, semiannual compilation of recorded music revenues, roughly equal to new vinyl in total revenue, The era of interactive streaming is recorded music's fifth era, nascent ideas around the smart speaker market. To that point, streaming is now the fastest growing portion of the market, jumping from just 8 million users in 2010 to 68 million in 2015. The global recorded music industry is expected to close 2019 at roughly $20-$21 billion. By continuing to use our site, you accept our use of cookies, revised. a meager 2% of industry revenues can be attributed to vinyl sales, make up about 14% of the industry’s overall revenue, proactively licensing music and creatively engaging with streaming and downloading opportunities for musicians. In fact, CDs are on track to fall below vinyl by the end of this year—especially counting the used vinyl market, which is roughly equal to new vinyl in total revenue. The challenge for the industry is to figure out innovative ways to harness that revenue stream by converting users to paid subscribers to give the industry a real boost. now making up 43% of digital revenue, nearly neck-and-neck with downloads at 45%. That means that streaming now accounts for three-quarters of total industry revenue. According to a new study from Pricewaterhouse Coopers (PwC), the live concert industry will experience significant growth during the next few years. The music industry is a bit of an enigma. The 7 Best (and Most Prestigious) Music Conservatories in America, Home Recording Studio Design: 5 Essential Steps to Build a Quality Studio, The 10 Best Music Schools (2020/2021): Attending College in the Age of COVID-19, Best Free VSTs for Home Music Producers in 2020/2021, Best Drum Machines for Making Beats in 2020/2021, Best USB Microphone for Live Streaming Music from Home. The numbers for 2018 show that the industry is continuing on the growth path that started in 2016 after an 11-year slump: Overall growth was 13% over last year to $9.8 billion—off slightly from 2017's 17% growth over 2016 but healthy nonetheless. All Rights Reserved, This is a BETA experience. Clearly, from the charts and stats above, permanent forms of music are on the decline, while more and more listeners are turning to streaming as their primary music source. Click on the map for the growth figures in each region. Having just about any music available at the tap of your finger or the click of your mouse is the new normal for listeners. Recorded music revenues, 2012-2018, $millions. Frances Moore, chief executive of IFPI, said: “The Global Music Report we issued today covers results for 2019 and reflects the successful work and investment of music creators – from record companies to artists and beyond. As this graphic demonstrates, Swift dramatically outclasses other artists (whose music remains available to stream) with the revenue from her 2015 tour alone, demonstrating that nothing seems to attract a fan like the live experience. Industry watchers used to wonder whether consumers would embrace the monthly subscription model over physical products or "ownership" of permanent downloads. The growth rate has been declining for the past two years; meanwhile, the growth of ad-supported interactive streaming—primarily YouTube and Spotify's free tier—is headed for zero. Growth in the music industry is due to increased consumption of digital music, particularly online streaming. This rise in the music industry’s revenue is actually thanks to the same digital music phenomenon that contributed to the damage in the first place. Opinions expressed by Forbes Contributors are their own. At wholesale value, revenues rose 16% to $3.5 billion. This includes personalizing content and advertising. The on-demand experience of hearing what you want when you want it – for a nominal monthly fee, or even for free! It also means that the Australian music industry has enjoyed 5 yearsof consecutive growth between 2015 and 2019 – the last time this happened was between 1995 and 1999. Revenue sourced from the digital distribution of music is expected to grow from $882 million in 2019 to 1.44 billion by 2024. IFPI, the organisation that represents the recorded music industry worldwide, today issued its annual Global Music Report. Breaking down entertainment industries in the Global Entertainment and Media Outlook 2018-2022 report, PwC reveals live music revenue will increase at a compound annual growth rate (CAGR) of 3.3% heading into 2022. Live music is the one area of the industry’s revenue that remains reliable as a guaranteed source of cash. Streaming still has a way to go, however, before it can be credited with rescuing the flailing music industry. That streaming income grew by 22.9% in 2019, including a 24.1% increase in paid subscriptions, which is now 42% of the total. Still value the unique experience of seeing their favorite artist in concert enough pay! Accounts for three-quarters of total industry revenue a reliable way to go, however, before it can credited. Digital music, particularly online streaming 298 musicians and music industry still has time figure! Billion to the nearly $ 2 billion contributed by paid subscribers who number around 68 at... 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