Business

IFPI Global Music Report 2020: Music Revenues Rise For Fifth Straight Year to $20 Billion

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IFPI chief executive Frances Moore says COVID-19 pandemic presents challenges "unimaginable just months ago."

LONDON — Global music sales grew for the fifth consecutive year in 2019 with streaming accounting for more than half of all label revenue for the first time, according to the International Federation of the Phonographic Industry's (IFPI) "Global Music Report 2020."

Total revenues climbed to $20.2 billion, a rise of 8.2% on the previous year. Driving the growth was a 23% jump in streaming revenues, which totaled $11.4 billion, accounting for 56% of all sales and offsetting a 5% fall in physical sales.

That means that after the industry bottomed out at $14.3 billion in 2013, the industry is almost back to 2003 levels when global revenue totaled $20.3 billion—at least on an absolute dollar basis, not counting for inflation.

Highlighting record companies' ever-increasing dependence on streaming services such as Spotify, Amazon and Apple Music, IFPI reports that subscription revenues grew 24% in 2019, accounting for more than 40% of all label income from recorded music. There are now 341 million users of paid streaming services worldwide, up 34% on 2018.

Excluding streaming, digital revenues slipped 15% on the back of a steep decline across multiple markets in download revenues, a format which now accounts for just 5.9% of all music sales worldwide. Add on other non-streaming sources and digital now accounts for 7.2% of all revenue.

CD and vinyl sales totaled $4.4 billion in trade revenue, accounting for around a fifth (22%) of the total global market. While that's down on the previous year, a small number of countries experienced growth in physical revenues, including the United States (+3.2%) and Spain (+7.2%). Revenues from vinyl rose by 5%, now making up more than 16% of overall physical revenues.

Performance rights revenues dropped 3.6% to $2.6 billion, accounting for 12.6% of total market. IFPI said the decline was attributable to one-off settlements in 2018, which inflated the prior year's revenues. Sync revenues grew by 5.8% year-on-year to $500 million, making up 2.4% of overall revenue.

In 2018, the percentages of market share for each segment were 49.5% streaming; 24.7% physical; 14% performance rights; 9.1% downloads and other digital; and 2.7% synchronization.

In terms of world markets, the U.S. retains its number one position with music sales growing 10.5%. Japan holds steady in second place despite experiencing a 0.9% drop on the back of falling demand for physical product, which fell 4.8%. IFPI did not provide a market-by-market revenue breakdown.

The third and fourth biggest markets for recorded music remain the United Kingdom (+7.2%) and Germany (+5.1%), respectively. The rest of the top 10 is made up of France (+3.9%), South Korea (+8.2%), China (+16%), Canada (+ 8.1%), Australia (+6%) and Brazil (+13.1%).

For the fifth consecutive year, Latin America was the fastest-growing region (+18.9%) with its three largest markets all seeing music sales climb; Brazil (+13.1%); Mexico (+17.1%); and Argentina (+40.9%). Latin America also saw the highest gains in overall streaming growth.

Europe, the world's second-largest region for music sales, grew 7.2% after being almost flat in 2018.

As a result of Japan's slowing music market, Asia experienced a far gentler rate of growth, but was still up 3.4% on 2019. Excluding Japan, Asia -- where physical sales remain the single largest revenue stream -- experienced double-digit growth (+11.5%), boosted by strong uptake of paid subscription streaming.

IFPI's Global Music Report was originally due to be published in March, but was postponed due to COVID-19. Reflecting on how the health crisis had impacted on the record business, IFPI chief executive Frances Moore said the pandemic "presents challenges unimaginable just months ago."

"In the face of a global tragedy, the music community has united behind efforts to support those affected," said Moore. "This is a critical and ongoing priority as our member record companies work to continue to support the careers of artists, musicians and employees around the world."

Topping IFPI's "Global Recording Artist" chart, which tracks consumption across all formats, is Taylor Swift, followed by Ed Sheeran, Post Malone, Billie Eilish and Queen.

As previously announced, the biggest-selling global album of 2019 was Japanese boy band Arashi's 5x20 All the BEST!! 1999-2019, which sold 3.3 million units. Taylor Swift's Lover was the year's second most popular album with 3.2 million sales, followed by BTS' Map of the Soul: Persona (2.5 million).

2019 year's biggest-selling digital single was Billie Eilish's "Bad Guy," which amassed 19.5 million global converted track equivalents. Lil Nas X's "Old Town Road" sold 18.4 million units worldwide; Shawn Medes and Camila Cabello's "Senorita" was third in the global song top 10 with 16.1 million track equivalents.

Ed Christman contributed to this report.