IFPI Global Report 2024: Music revenue up 10% to $28.6 billion

Global music sales grew for the ninth year in a row in 2023, with recorded music revenue increasing in every market and region and across almost all formats, according to the International Federation of the Phonographic Industry (IFPI)'s World Music Report 2024.

Total revenue rose to $28.6 billion, up just over 10% year-over-year and the second-highest growth on record after 2021's 18.5% year-over-year rise.

Total sales in 2023 are the highest since 1999 – when IFPI first began tallying global music revenue, and sales totaled $22.2 billion – on an absolute dollar basis, not accounting for inflation. Piracy and declining physical sales drove the market down to $13 billion in 2014.

Last year's growth was driven by an 11.2% increase in paid subscription revenue, which totaled $14 billion from $12.7 billion in 2022 and accounted for almost half (48.9%) of global music sales.

The increase in global paid streaming revenue comes after many of the top streaming services, including Spotify, Apple Music, Amazon Music, YouTube Music and Deezer, all increased their subscription prices in key territories over the past 12-18 months. For the majority of streaming services, the increases were their first price increases since they launched more than a decade ago.

Despite rising costs for consumers, the number of music streaming subscribers continues to grow globally, with IFPI reporting that the number of paid subscriptions to streaming services will exceed 500 million for the first time in 2023.

When shared and family accounts are taken into account, there are now more than 667 million paid subscription account users worldwide, the London-based organization says, up 13% from the 589 million recorded in the previous 12 months.

Total streaming revenue, made up of paid subscriptions and ad-supported tiers, rose 10% to $19.3 billion to make up 67% of global recorded music sales, roughly flat with last year's market share.

However, streaming's annual growth continues to slow as a result of its already high penetration of the global music market. In 2021, total streaming revenue grew 24% year over year. In 2022, the growth rate has more than halved to 11.5%.

Sales across all formats are increasing

Although streaming continues to dominate global music revenue, 2023 also saw strong gains in physical disc sales and performance rights revenue. Combined CD and vinyl revenue rose for the third consecutive year to $5.1 billion, up 13% from the 2022 total, with Asia generating nearly half (49%) of all global physical revenue.

IFPI attributed the region's continued dominance of the physical market to high sales of K-pop songs, such as boyband Seventeen, which topped IFPI's 2023 global album charts with FML and also had the eighth best-selling album of the year with a follow-up set SEVENTEENTH HEAVEN.

In terms of market share, physical accounted for just under 18% of the total market last year, up marginally from 17.5% in 2022, but still down from 2021's share.

Performance rights revenue, meanwhile, rose 9.5% to $2.7 billion, accounting for 9.5% of global revenue, while sync revenue rose 4.7% to $632 million, representing the 2.2%.

The only formats to decline in 2023 were digital downloads and what IFPI classifies as other digital formats (non-streaming), which fell 2.6% to $900 million, accounting for just 3.2% of the global market .

“The figures in this year's report reflect a truly global and diverse industry,” said IFPI's chief financial officer and interim joint chief. John Nolan in a statement accompanying the report.

Nolan said strong growth in paid streaming subscribers worldwide, as well as service price increases, contributed “significantly” to overall revenue growth. He also said the music industry's recovery from its lows a decade ago would not have been possible without “sustained investment by record companies in artists and their careers”.

According to IFPI data, record companies invest $7.1 billion each year worldwide in A&R and marketing alone. They are also paying more money than ever to artists, the IFPI said, with record label payments to musicians rising 96% between 2016 and 2021, against a 63% increase in record company revenue.

No change in the top 10 global music markets, with the US still on top

In terms of global markets, IFPI said music revenue rose in all 58 markets it tracks, with the U.S. retaining its long-standing No. 1 position with music sales up 7.2 percent, up from 4 .8% last year.

Japan remains firmly in second place with sales expected to grow by 7.6% in 2023. The third and fourth largest recorded music markets remain the UK (+8.1%) and Germany (+7%), respectively.

The rest of the top 10 is made up of China (+25.9%), which represents the fastest growth of any market in the top 10, followed by France (+4.4%), South Korea (percentage not provided) , Canada (+12.2). %), Brazil (+13.4%) and Australia (+11.3%). (IFPI's open-access report does not provide revenue breakdowns by market).

These cross-market gains are reflected on a regional basis with revenue from the US and Canada region up 7.4%.

Combined, the US and Canada region account for nearly 41% of global recorded music revenue, IFPI reports, while Latin America — where streaming makes up 86% of the market — saw 19.4% growth, surpassing by far the global growth rate and represents the 14th consecutive year of revenue growth in the region.

Europe remains the second largest music sales region, accounting for more than a quarter (28%) of global revenue and up 8.9% year-on-year. In third place is Asia, where revenue grew nearly 15% in 2023, driven by strong gains in physical and digital sales.

Once again, the fastest growing market region was Sub-Saharan Africa, which recorded a 25% rise in music sales, mainly due to increased use of paid subscription services (up by less than a quarter) and the booming music market of South Africa, which grew by almost a fifth and contributed more than three-quarters of the region's revenue.

Revenue in the Middle East and North Africa, where streaming has a 98% share of the recorded music market, rose almost 15%.

(IFPI uses current exchange rates when compiling its World Music Report, recalculating all historical local currency values ​​on an annual basis. Therefore, market values ​​vary retrospectively as a result of foreign currency movements, says IFPI, which represents more than 8,000 record label members worldwide. including all three major record labels, Universal Music Group, Sony Music Entertainment and Warner Music Group.)

Transformation in progress

In attendance at the launch of the Global Music exhibition in central London were senior executives from all three major labels, as well as Konrad von Löhneysenfounder and director of Germany-based independent Embassy Of Music. Leila Oliveirapresident of Warner Music Brazil, also participated in the event via video call from Rio.

Reflecting current industry trends, the potential impact of artificial intelligence (AI) on the record business, and particularly the risks surrounding genetic AI, was a key topic of discussion among the speakers.

“The reality is that we are in the early stages of another transformative event for the music industry,” he said Dennis Cookerpresident of the global digital business at Sony Music Entertainment.

“While I'm excited about where the evolution will lead, it's important that we find new products and new business models around these technologies to ensure that the future of human creativity can be invested in and that creators can be rewarded,” he said. Kooker. .

He then warned: “We also need to fight the position that too many companies want to take to ignore copyright and intellectual property rights and use our content without permission or without proper compensation.”

Adam Granitisexecutive vice president of market development at Universal Music Group, said that while AI used “in the service of artists is great,” AI using musicians' work “without authorization and compensation is not.”

“We believe it is entirely possible to develop and adopt AI technology while ensuring that artists' rights are protected,” Granite said, citing UMG's recent partnerships with Roland Corporation and YouTube on AI initiatives as developments that are being driven from the industry that give artists a seat at the table and will help secure their rights,” as more AI products enter the music industry.