Global recorded music revenues increased by 10.2% in 2023, according to IFPI.
The recording industry trade body has issued its all-important Global Music Report for the past 12 months. Following a bit of a wobble (relatively speaking) in 2022, market growth has surged into double digits again, driven largely by a further expansion in paid streaming subscribers.
Figures released today in IFPI’s Global Music Report show that total trade revenues reached $28.6 billion in 2023, the ninth consecutive year of growth. It was unveiled during a presentation in London today (March 21).
Following another decent market performance in 2023, the UK remains at No.3 globally behind the US and second place Japan – both non-movers in a static Top 5 completed by Germany at No.4 and China at No.5.
Globally, streaming revenues accounted for the majority of revenue growth and claimed a 67.3% total share of the market. Overall streaming revenue growth of 10.4% to $19.3 billion was down on the 11.4% increase in the prior year.
Crucially, though, subscription streaming revenues alone grew by 11.2% (up from 10.1% a year earlier) and made up 48.9% of the global market. In 2023 the number of paid subscriptions to music streaming services passed 500 million for the first time and there are now more than 667 million users of paid subscription accounts, although IFPI noted that household penetration varies greatly by country.
There’s also a positive story about the physical music sector, which not too long ago was simply a case of managing decline. In the UK, ERA recently reported the first value increase in CD revenues for 20 years. Globally, this is the third consecutive year in which both digital and physical revenues (from CD and vinyl) have increased simultaneously.
For 2023, thanks to some high-profile releases (IFPI Global Artist Chart No.1 act Taylor Swift, Seventeen, the Rolling Stones, Morgan Wallen, Stray Kids, NCT Dream) and strong catalogue, IFPI is reporting a double-digit percentage increase in physical revenues (up by 13.4%).
Physical sales were worth $5.1 billion in 2023 and accounted for 17.8% of the overall market (up from 17.3% in the previous year). Asia accounted for almost half of global revenues for physical (49.2%) thanks to the huge appeal of K-pop acts.
There were also gains in income from performance rights, which increased by 9.5%. Sync revenue growth slowed to 4.7% in 2023 from the 23.9% in the prior year.
Inevitably, revenue from downloads and other digital was down (-2.6%).
There was growth across the globe as the work and investment from record companies contributed to every region experiencing revenue growth in 2023. Five of the world’s seven regions posted double-digit percentage gains.
However, nobody is taking anything for granted at what is widely seen as a transformational moment for the music industry, particularly as streaming markets mature. In recent months, labels and streaming platforms have been cutting staff to prepare for a new era of tech and entertainment, including the impact of generative AI, and attempting to better service superfans.
There have also been disruptive episodes including UMG’s licensing dispute with TikTok, although the major reported that the platform was responsible for only 1% of its revenues.
It was notable at the launch event discussion with execs that navigating monetisation issues generally around ad-funded short form platforms, not just TikTok, is seen as a big subject to tackle right now. IFPI’s recent report showed that free short-form video is the top method for 16-24 year-olds to engage with music, not subscription streaming. Check musicweek.com for our round-up of the key topics under discussion at the IFPI launch.
This growth results from record companies’ sustained investment in artists and their careers and the impact it has on music ecosystems all over the world
John Nolan
John Nolan, IFPI’s chief financial officer and interim joint head of IFPI, said: “The figures in this year’s report reflect a truly global and diverse industry, with revenues growing in every market, every region and across virtually every recorded music format. For the third year in succession, both physical and digital formats grew with a strong rise in the users of paid streaming subscribers – as well as price increases - contributing significantly to total revenue growth.
“This growth results from record companies’ sustained investment in artists and their careers – more than $7.1 billion annually on A&R and marketing alone – and the impact it has on music ecosystems all over the world. Fans are increasingly valuing music, with unprecedented choice and access to new releases, with 2023’s IFPI Global Charts including a diverse range of new genres and artists. This is testament to the talent of these artists, the passion of their fans, and the work of record labels both in championing artists and providing the best possible foundations for their global success.
“Music has shown time and time again that it can evolve and innovate but the report demonstrates it is the partnership between artist and label which is at the heart of the growth of music markets worldwide with the ensuing positive impact these have on their local economies.”
Lauri Rechardt, IFPI’s chief legal officer and interim joint head of IFPI, said: “The sustained growth of the recorded music market is encouraging, but it’s also right for us to acknowledge the challenges the industry faces, including streaming fraud, digital piracy in all its forms and, of course, the threat from the abuse of generative artificial intelligence if it is not developed responsibly and with respect for artists’ and labels’ rights.
“Music fans greatly value authenticity and our industry has a strong track record of licensing music and supporting the development of new services that create these experiences for fans. That said, we still need effective tools and the support of authorities to tackle unauthorised uses and to ensure the music ecosystem remains one that is sustainable for the long-term.”
Growth in the world’s regions:
USA & Canada +7.4%
Representing the greatest share of global recorded music revenues (40.9%), there was a gain of 7.4% in 2023 in the USA and Canada. Revenues grew at a faster rate than in 2022 (+5.1%). Revenues from the USA, the world’s single largest recorded music market, rose by 7.2%. In Canada, another Top 10 market, revenues surged by 12.2%.
Europe +8.9%
Representing more than a quarter of global revenues (28.1%) after revenue growth of 8.9%, Europe remained the second largest region in the world for recorded music revenues in 2023. The region’s three biggest markets all recorded healthy growth: the UK (+8.1%), Germany (+7.0%) and France (+4.4%).
Asia +14.9%
The third largest region globally, revenues in Asia rose by 14.9% in 2023, driven by strong gains in physical and digital revenues, and continuing a multi-year upward trajectory. The two largest Asian markets saw healthy growth: revenues from Japan, the world’s second biggest market, were up by 7.6% and there was steep growth in China (the No.5 market) of 25.9%, the fastest rate of increase in any Top 10 market.
Latin America +19.4%
In the 14th consecutive year of revenue growth, recorded music revenues in Latin America rose steeply in 2023 by 19.4%, once again outpacing the global growth rate. There were double-digit percentage climbs in revenues in Brazil (+13.4%) and Mexico (+18.2%), the region’s largest markets. Streaming was the key driver and made up 86.3% of the region’s revenues.
Australasia +10.8%
Australasia posted double-digit percentage growth of 10.8% in 2023, an increase on the 8.3% rise in 2022 and boosted by an increase in subscription streaming revenues (+13.5%). Revenue growth accelerated in Australia, a global Top 10 market, up by 11.3%. In New Zealand, revenues increased by 8.4%.
Middle East & North Africa +14.4%
Streaming revenues dominated again in the Middle East and North Africa (MENA) with a 98.4% share of the market in that region. Total MENA revenues rose by 14.4% in 2023, exceeding the global growth rate.
Sub-Saharan Africa +24.7%
Sub-Saharan Africa once again had the fastest growth of any region and was the only one to surpass 20% growth: revenues climbed by 24.7%, fuelled by gains in paid streaming revenues (+24.5%). South Africa remained the largest market in the region, contributing 77.0% of regional revenues after growth of 19.9%.
For the market measurements, local currency values are stated at independently sourced 2023 exchange rates. IFPI restates all historic local currency values on an annual basis, so that market values can vary retrospectively as a result of foreign currency movements.
PHOTO: Beth Garrabrant
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