The IFPI's annual figure for global recorded music revenues, released on Thursday (March 21) for 2023, is the gold standard for tracking the health of the music business. It is the number most often cited in company reports, market research and media articles. It's also a bit dated.
Traditionally, record labels sold and distributed music, secured synchronization licenses, and collected performance and neighboring royalties. But a modern label also collects expanded rights revenue — from multi-rights, 360-degree recording contracts — taking a share of artists' income from merchandise, touring and branding, among other sources. This expanded rights revenue is not part of IFPI's annual revenue statement, but MIDiA Research includes it — and more — in its annual estimate.
MIDiA is more crowded than the world recorded music revenue in 2023 it was $35.1 billion, nearly 23% higher than IFPI's $28.6 billion. According to MIDiA, which states Advertising sign His estimate, based on publicly available information and interviews, has expanded rights revenue totaling $3.5 billion in 2023.
Some revenue from expanded rights is visible. Universal Music Group, for example, collected 706 million euros ($764 million) in commercial revenue from Bravado, its wholly-owned commercial company, in 2023. For other companies, extended rights are more difficult to determine. Warner Music Group had $744 million in artist services and expanded rights revenue in 2023. WMG's expanded rights include merchandising, VIP tickets, fan clubs, promotion and concert management, according to last quarterly report.
Neither is the global revenue figure right or wrong. they are just different. IFPI's revenue figures reflect how record companies generate revenue from the rights associated with master recordings through sales, streaming and licensing. MIDiA Revenue recognizes that the role of record labels has expanded far beyond monetizing masters.
Even the term “extended rights” is problematic because it suggests that merchandise and branding are not central to a label's mission. That's not necessarily the case in 2024. Consider the wave of K-pop companies expanding globally outside of South Korea. HYBE, the home of boy band BTS, is a hybrid record label, talent agency and management company with a slow, painstaking artist development process and a business model that captures much more than recorded music sales. In 2023, 55% of HYBE's revenue came from sources other than recorded music. Concerts accounted for about 16% of revenue, merchandise and licensing 15%, and advertising and appearances 7%. In fact, MIDiA estimated that Korean labels – including SM Entertainment, YG Entertainment, JYP Entertainment and Starship Entertainment – accounted for nearly 70% of non-major expanded rights revenue.
Another difference between the IFPI and MIDiA shows is the latter's emphasis on the fast-growing community of independent artists. Easy access to recording tools and distribution has brought the artist's everyday recordings to digital platforms around the world. MIDiA estimates there was $1.8 billion in “artist direct” revenue in 2023. Artist direct is a category of self-published independent artists using self-service platforms like DistroKid and TuneCore and MIDiA's Creators Survey 2023 there are an estimated 6.4 million artists in this segment. While 38% of these independent artists aspire to be full-time musicians, 36% do not expect to focus on music as an exclusive career. Subtracting expanded royalties and direct artist revenue from MIDiA's estimate of $35.1 billion narrows the gap between that and IFPI's $28.6 million.
Another difference between the two reports comes from MIDiA's inclusion of output library revenue in its sync revenue. Production music — which ranges from the beat marketplace BeatStars to the online library Epidemic Sound — often exists outside the label system that traditionally develops and markets artists. Unlike artist-driven music, production music is often nameless and faceless content that advertisers and other content creators license for its specific sound and style rather than artist name recognition. However, the lack of star power is the point: Production music libraries are becoming increasingly popular among content creators who need affordable background music.
Broader metrics will be crucial to tracking the recorded music activity of the future. Labels will pursue “superfans” through products and services that may not generate typical sales and streams. Artificial intelligence will create new licensing opportunities. Greater adoption of the K-pop model will change what it means to be a label. When that happens across the board, $28.6 billion in annual revenue will be a starting point. Judging by MiDIA's 2023 report, it already is.
from our partners at https://www.billboard.com/pro/music-revenue-2023-why-ifpi-midia-numbers-different/