IFPI Global Music Report 2019: Revenues rise 10%, UK up to No.3

IFPI Global Music Report 2019: Revenues rise 10%, UK up to No.3

Streaming-led growth has powered the UK to No.3 in the latest IFPI Global Music Report.

The UK has leapfrogged the heavily physical German market in the 2018 results, which are analysed and coordinated by the IFPI. Germany was the only Top 10 European market to see a decline in revenues in 2018 (down 9.9%), as a result of its late transition away from the physical-led market. The UK’s 3.1% growth made it the largest market in the region.

The global recorded music market grew by 9.7%, the fourth consecutive year of growth and ahead of last year's 7.4% market increase. Total revenues for 2018 were $19.1 billion (£14.6bn). 

Streaming revenue grew by 34% and accounted for almost half (47%) of global revenue. That was driven by a 32.9% increase in paid subscription streaming. 

The IFPI said there were 255 million users of paid streaming services by late 2018, with paid streaming accounting for 37% of total recorded music revenue. Spotify alone has probably already passed 100m subscribers, based on its Q4 results. Subscription audio streaming is now the single biggest source of revenue at around $7bn (£5.4bn), according to the IFPI.

The total streaming total was $8.9bn (£6.8bn), while digital revenue hit $11.2bn (£8.6bm) – the first time it’s passed $10bn (£7.7bn). Digital revenue is now above 50% of the total in 38 markets; the overall IFPI global digital figure is 58.9% of recorded music revenues. 

Frances Moore, chief executive of IFPI, said: “Last year represented the fourth consecutive year of growth, driven by great music from incredible artists in partnership with talented, passionate people in record companies around the world.

“Record companies continue their investment in artists, people and innovation both in established markets and developing regions that are increasingly benefitting from being part of today’s global music landscape.”

Record companies continue their investment in artists, people and innovation both in established markets and developing regions

Frances Moore

The IFPI has previously named Drake as the biggest recording artist of 2018, while The Greatest Showman was the best-selling album. Camila Cabello’s Havana was the biggest global single of the year.

Growth in streaming offset the 10.1% decline in physical revenue and a 21.2% decline in download revenue. However, No.2 market Japan grew physical revenues by 2.3%, alongside a 32.6% growth in streaming revenues.

Japan was up 3.4%, while the overall Asia and Australasia market increased by 11.7%. Paid audio streaming was up 29.5% in the region, which became the second largest for combined physical and digital revenue. There was strong growth in South Korea (up 17.9%) and Australia (up 11%). 

In India, the physical market was up 21.2%, while the country is also opening up to Western streaming giants, including YouTube Music and Spotify.

China, a new entrant in the Top 10 for 2017, moved up to No.7 in the latest figures.

For the fourth consecutive year, Latin America was the fastest-growing region (up 16.8%), with those gains led by Brazil (up 15.4%) and Mexico (up 14.7%). 

Paid streaming rose by 29.2% in Europe, while physical revenues fell by 19.4% and downloads by 24.3%. Performance rights revenue for the region was down by 6.7% - the steepest decline for that source of income in any region. As a result, overall growth in Europe was flat at 0.1%, although that was partly attributed to performance rights settlements in the previous year.

The North America region was up by 14%, though that was down on the 17.1% in 2017. Steep physical decline of 22% (compared to just a 4.3% decline in the prior year) was offset by powerful streaming growth of 33.4%.

While Canada remained flat, the US posted impressive year-on-year growth of 15% to secure its position as No.1 market. At 74.2%, the US is now a predominantly digital market. The fastest-growing format in the US was paid streaming, which accounted for 59.4% of digital revenue.

There was also a nod to the Copyright Directive and potential fix for the so-called value gap, as the IFPI looks to continued growth.

Moore added: “As music markets continue to develop and evolve, it is imperative that the appropriate legal and business infrastructure is in place to ensure that music is fairly valued, and that the revenues are returned to rights holders to support the next cycle of development.

“We continue to work for the respect and recognition of music copyright around the world, and for the resolution of the value gap around the world, and for the resolution of the value gap by establishing a level playing field for negotiating a fair deal for those who create music. Above all, we are working to ensure that music continues its exciting, global journey.”

IFPI also revealed that the vinyl revival continues globally. The format was up 6% and recorded its 13th consecutive year of growth. Vinyl now has a 3.6% share of the overall market.

Sync revenue was up by 5.2%, which was more modest growth compared to the 14.6% uplift in the prior year. Performance rights revenue was up by 9.8% and now represents 14% of total recorded music revenues.

author twitter FOLLOW Andre Paine

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