The global record business will soon pop the champagne to celebrate another year of streaming-led revenue growth, judging by the few individual country revenue figures for 2023 that have been released so far this year. The IFPI won't release its 2023 report until Thursday (March 21), but major markets such as the UK, France, Germany, Spain and Japan have already released figures showing 2023 produced another good harvest for the labels.
However, while streaming continues to push markets in positive directions, growth has slowed and revenues in some markets remain well below CD-era levels. Worse, some countries may have insufficient flow growth to return to earlier peaks.
SNEP, the recorded music trade body in France, issued a stark warning this week was announced that the country's revenue in 2023 increased by 5.1% to 968 million euros ($1.05 billion at the average exchange rate in 2023). However, although digital revenue rose 8.8% to 620 million euros ($671 million) and streaming revenue rose 9.2%, a 10% increase in subscription streaming revenue “remains too weak for to fully fuel market growth, even though it is the main source of value creation,” SNEP wrote in its 2023 report.
France can reasonably be expected to do better in 2024. The country was the sixth largest recorded music market in 2022, according to the IFPI, and is home to Deezer, an early entrant into the music subscription market. But in 2023, France had a penetration rate of only 16% for paid subscribers, according to SNEP, “one of the lowest among the main music regions. Revenue growth from these subscriptions is slowing here, while our market is far from mature.” This is not a brand new concern: SNEP sounded the same alarm a year ago.
So, while streaming is creating new opportunities worldwide for labels, publishers and creators, it has not developed enough to help France recover the revenues lost during the decline of the CD in the 2000s. France's revenues of €968 million in 2023 was 25% down from the €1.3 billion in revenue it had in 2002. In contrast, the US recorded music market's $15.9 billion was well above the CD-era peak of $14.5 billion, 1999, according to the RIAA.
Elsewhere, some major recorded music markets reported decent profits in 2023 without voicing the kind of dire warning seen in France.
German recorded music industry to grow by 6.3% in 2023, according to BVMI was announced March 6. Digital revenue increased by 8.4% and accounted for 81.5% of total revenue. Audio streaming grew by 8.4% and accounted for 74.8% of the total market and 92% of digital revenue. Physical sales accounted for 18.5% of total revenue and were up 0.1% from 2022. CD sales were down 5.9% but accounted for 11.3% of total revenue and about 61% of physical revenue. Vinyl sales were up 12.6%.
Spain's recorded music market will grow by 12.3% to 520 million euros in 2023, Promusicae announced on Tuesday (March 12th). Streaming rose 17.3% to 398.6 million euros ($432 million) and accounted for 77% of total revenue, which was a remarkable 150% higher than the low of 159.7 million euros ($212 million) in 2013. But, like France, Spain has yet to match its peak revenues from the CD era. Last year's revenue was on par with the 475 million euros ($534 million) seen in 2005, a sharp drop from revenues of more than 700 million euros ($630 million) in 2001.
Apart from SNEP in France, only the BPI in the UK raised any kind of alarm. Recorded market revenue rose 8.1% in 2023 to 1.43 billion pounds ($1.78 billion), the agency said on Thursday (March 14), with streaming revenue rising 8.4% to 962 million pounds ($1.2 billion) and account for 67.4% of total revenue, up from 67.3% in 2022 and well above the 8.6% seen a decade earlier. But BPI CEO Dr. Joe Twist warned against taking growth for granted and stressed the need for “significant label investment” to keep the market thriving.
There's one reason the kind of gains the music markets are seeing right now might not look like unqualified success stories: inflation. Adjusted for inflation, revenue in France last year was actually 48% below 2002. and in 2022, the United States was 38% below its 1999 peak.
The failure of these major markets to return to CD-era highs explains the unprecedented rush of the music business as companies invest in growth markets in search of export-ready artists and untapped streaming potential. Both majors and independents are investing in Africa, the Middle East/North Africa, Asia and South America – regions with large populations, cash-strapped streaming markets and exportable music that could generate royalties in Western countries .
These growing markets, and some big ones like the United States and the United Kingdom, helped global recorded music trade revenue reach a new high of $24 billion in 2021, up from $23.2 billion in 1999 (not adjusted for inflation). While both the United States and the United Kingdom are past their CD era peaks in 2021 (not adjusted for inflation), some other major markets are still trying to recapture their glory days. Companies looking to grow in these markets may need to look beyond their borders to get there.
from our partners at https://www.billboard.com/pro/global-music-revenue-2023-rise-growth-slowed/
