ERA has issued a pointed response to the IFPI’s Global Music Report and its focus on the impact of record labels on the recorded music market by highlighting the significance of digital services and retailers in driving revenue growth.
The report, which was published yesterday, found that the global recorded music market grew by 5.9% in 2016 to $15.7 billion, according to the IFPI’s new Global Music Report, achieving its highest growth rate since the organisation began tracking the market 20 years ago.
Commenting on the findings, IFPI chief executive Frances Moore, said: “Fans are engaged with music in an amazing variety of formats, from the vinyl revival to the phenomenon of musical.ly, but the growth story is centred on services which are widening streaming’s demographic appeal.
“Record companies and their distribution partners have been instrumental in this, licensing more than 40 million tracks to hundreds of digital services worldwide and developing the high performance systems that allow music to be accessed around the world. Their approach has been global in scope and yet local in execution, adapting their practices to open up legal digital markets for music."
Now, ERA CEO Kim Bayley has responded with a statement intended to throw some light on the contribution of digital services and retailers.
“The IFPI numbers amount to a ringing endorsement of the ability of digital services and retailers to broaden the market for music and generate more revenue for artists and songwriters,” Bayley said. “It is significant that the two fastest growing sectors of the music industry – streaming and vinyl records – are both the result of the innovation, market insight and investment of retailers and digital services.
“Investment from services like Spotify, Amazon Prime, Deezer and Google Play has effectively thrown a lifeline to the music industry. The key to maintaining that investment has to be to ensure an equitable split of the fruits of that success between the digital services, the artists and songwriters and the labels and music publishers who represent them.”
The new report revealed that there were 112 million users of paid music streaming subscriptions by the end of 2016, driving a year-on-year streaming revenue increase of 60.4%. Over the course of the year, digital income accounted for half the global recorded music industry’s annual revenue for the first time.
The streaming boom more than made up for a 20.5% slump in downloads and a 7.6% decline in physical revenue – a higher rate than the previous year which saw a decline of 3.9%. Streaming has also helped drive growth in emerging markets, with China (+20.3%), India (+26.2%) and Mexico (+23.6%) each experiencing significant revenue growth.
You can read major label reaction to the report here.