The latest Global Music Report – State of the Industry 2024 for the year 2023, published by the International Federation of the Phonographic Industry (IFPI), provides insights into the current state of the music market. Here are three key elements highlighted in this report:
- Global Music Market in Numbers;
- Streaming vs. Physical Formats; and
- Global Music Market by Regions.
What is IFPI?
The International Federation of the Phonographic Industry (IFPI) is the voice of the recording industry worldwide. Along with its network of national groups, IFPI represents the interests of around 8000 members globally. The organization publishes various reports, providing data and analysis on the current state of the global recording industry. It also discusses how we engage with music and the role record labels play in this area.
IFPI also provides analyses of macroeconomic indicators, emerging markets, and key metrics such as the number of streaming service subscribers. In summary, IFPI not only collects and provides data but also plays an active role in management, helping its members set the direction for future development in this crucial area. These actions aim to promote the value of recorded music, advocate for the rights of record producers, and expand commercial applications of recorded music worldwide.
I. Global Music Market in Numbers
Based on data from the report, significant changes in the global music market in 2023 can be observed. Here are the main points:
- Global Revenue Growth: In 2023, there was a 10.2% increase compared to the previous year, indicating dynamic growth in the music industry worldwide.
- Growth in On-Demand Streaming Revenue: The most noticeable change was an 11.2% increase in revenue from on-demand streaming, indicating continued popularity of streaming services among music consumers.
- Significant Share of Streaming Revenue: The share of streaming revenue in total global revenue increased to 63.7%, confirming that streaming continues to dominate music consumption worldwide.
- Growth in Physical Format Revenue: Interestingly, despite the rise in streaming popularity, revenue from physical formats (vinyl records, CDs) also increased by 13.4%. This suggests that traditional physical forms of music distribution still have a place in the market and many supporters.
- Growth in Copyright Revenue: A 9.5% increase in copyright revenue also indicates that managing copyrights is becoming increasingly important for artists and music labels.
In summary, based on the numbers, 2023 was a very successful period for the music industry, with strong revenue growth, further development of streaming platforms, and simultaneous maintenance of the significance of traditional music formats.
II. Streaming vs. Physical Formats
The report illustrates the continued dominance of the streaming revolution in the music industry. However, contrary to predictions, all music formats experienced revenue growth except for downloads and other digital formats. The highest growth among formats was recorded in physical formats such as vinyl records and CDs, which saw a 13.4% increase in 2023, the highest growth rate among all data.
- Physical Formats: For the third consecutive year, revenue from physical formats increased, reaching a 13.4% growth in 2023, a significant increase compared to the previous year’s growth of just 3.8%. The dynamic growth in revenue from CDs and the growing interest in vinyl contributed to physical formats being worth $5.1 billion in 2023, accounting for 17.8% of the global market, compared to 17.3% in 2022. Asia remained the leading region for physical formats, accounting for almost half (49.2%) of global revenue from this format, mainly due to the sale of K-Pop records.
- Streaming: The growth in global streaming revenue in 2023 (10.4% to $19.3 billion) was the main driver of overall global growth. Streaming accounted for over two-thirds (67.3%) of the global music market. Although it was a moderate decline compared to last year’s growth dynamics of 11.4%, within this format, revenue growth from subscriptions accelerated to 11.2% in 2023 (up from 10.1% in 2022).
- Copyrights: Copyright revenue – the use of recorded music by broadcasters and public places – continued to grow in 2023, increasing by 9.5% after surpassing pre-pandemic revenue levels in 2022. Copyright revenue of $2.7 billion accounted for 9.5% of the global market.
- Synchronization: Synchronization revenue amounted to $632 million in 2023, representing continued growth compared to 2022 (+4.7%), although the growth rate was slower than the previous year (+23.9%). This format includes revenue from the use of recorded music in advertisements, films, games, and television and accounted for just 2.2% of total recorded music revenue.
- Downloads and Other Digital Files: The only format that experienced a decline in 2023 was revenue from downloads and other digital formats (excluding streaming), which decreased much slower at 2.6% compared to the previous year (-11.8% in 2022). Overall, this format accounted for only 3.2% of global recorded music revenue in 2023, with streaming dominating the digital market.
Summary: The IFPI Global Music Report 2024 presents data for the year 2023, showing continued dominance of streaming but also dynamic growth in physical formats such as vinyl and CDs. Streaming generates over two-thirds of revenue, but physical formats recorded the highest growth in years. Copyright revenues also grew, surpassing pre-pandemic levels. The only format with declining revenues is downloads and other digital formats, continuing the trend from previous years.
III. Global Music Market by Regions 2023
Global Music Market by Regions 2023 brought a positive picture of global music market growth: every region saw revenue growth, with five regions recording double-digit percentage growth. Interestingly, Sub-Saharan Africa experienced the highest growth.
USA & CANADA
Accounting for the largest share of global music revenue, the United States and Canada saw a 7.4% growth in 2023. Revenue grew faster than in 2022 (+5.1%). In the USA, the world’s largest music market, revenue grew by 7.2%. In Canada, another top-ten market, revenue increased by 12.2%. Together, the two markets had a 40.9% share of total recorded music revenue.
LATIN AMERICA
In the fourteenth consecutive year of revenue growth, recorded music revenue in Latin America surged in 2023, reaching 19.4%. Once again, it outpaced global growth. Brazil (+13.4%) and Mexico (+18.2%), the region’s largest markets, recorded double-digit percentage growth. Streaming was a key driver, accounting for 86.3% of regional revenue.
EUROPE
Representing over a quarter of global revenue (28.1% share), Europe remained the second-largest region in the world in terms of music revenue in 2023, with revenue growing by 8.9% and exceeding $8 billion. The three largest markets – all in the top ten – recorded good growth: the United Kingdom (+8.1%), Germany (+7.0%), and France (+4.4%).
MENA
Streaming revenue continued to dominate in the Middle East and North Africa (MENA) region, accounting for 98.4% of the market share. Total MENA revenue grew by 14.4% in 2023, although it was a lower growth rate than in 2022 (+26.8%).
SUB-SAHARAN AFRICA
Sub-Saharan Africa again recorded the fastest growth of all regions and was the only region to exceed growth above 20%: revenue grew by 24.7% and was driven by growth in revenue from paid streaming subscriptions (+24.5%). South Africa remained the largest market in the region, contributing 77.0% of regional revenue with a growth of 19.9%.
AUSTRALASIA
Australasia recorded double-digit percentage growth of 10.8% in 2023, an increase from 8.3% growth in 2022. The growth was driven by higher revenue from subscription streaming (+13.5%). Growth accelerated in Australia, a global top-ten market, where revenue grew by 11.3% (+8.2% in 2022). In New Zealand, revenue increased by 8.4%.
Summary
The results of this year’s Global Music Report 2024 are promising for the music industry worldwide, showing stable revenue growth in every region. Growth in streaming revenue plays a crucial role in revenue growth in most regions, indicating a change in consumer preferences in music consumption. Sub-Saharan Africa emerged as a particularly dynamic market, which may encourage investors and the industry to further develop this area.
