The global music industry suffered a lot due to the ongoing pandemic. The recorded music industry witnessed growth with the help of digital streaming platforms.
Like many other industries, the global music industry has also been suffering due to the ongoing pandemic that had started in 2020. The International Federation of the Phonographic Industry (IFPI) annually lists the biggest recorded music markets in the world. And according to the IFPI, the worldwide recorded music market had a growth rate of 7.4% in 2020. It was the sixth consecutive year of growth. For the industry. Asper the Global Music Report released by the IFPI, the total revenues in 2020 were US$21.6 billion.
How are the rankings determined?
The rankings of the markets are determined by their retail value and not units. The retail value of the markets differs each year. As the financial data is provided in US dollars, all the music markets except for the US market depend heavily on the exchange rate fluctuations and changes occurring in revenue in the local currency terms.
How are streaming services helping with the growth?
The recorded music industry has been seeing substantial growth despite the epidemic only because of the various streaming services. While the sale of physical copies of music has declined due to the pandemic, the use of online music streaming services has increased tremendously. The revenue of physical music declined by 4.7% and performance rights revenue also decreased by 10.1% as a result of the Covid-19. The current growth has been caused by paid subscription streaming revenues. It has increased by an unbelievable rate of 18.5%. by the end of 2020, there have been a total of 443 million users with paid subscriptions. The rate of total streaming, both paid and free subscription and ad-supported has grown nearly 19.9%. The revenue also grew 62.1% of total global recorded music or $13.4 billion.
The record companies have dedicated and invested a lot in the growth of the digital industry, which proved to be beneficial in countering the extraordinary situation that occurred in 2020. The year had been a very challenging time for musicians. Recording companies have offered amazing support to their artist partners in creating and recording new music. The entire industry has been working to make new innovations to offer fans all over the world a better experience at music listening.
IFPI chief executive’s point of view
The current chief executive of the IFPI said that while the entire world struggles to fight the Covid-19 pandemic, people are reminded of the sustaining power of music to console, heal, and spirit of humanity. He says the power of a great song or the relationship between the musicians and audience is timeless. As the whole world came under lockdown, fans were unable to enjoy live performances. The streaming services came to the rescue offering their quality music listening experience through these platforms.
The recording companies have been making an ongoing investment in artists and their music. They are also making innovative efforts to bring their music to the fans in new ways. With the backing of the streaming platforms and their paid subscription streaming, the global recorded music industry has experienced a growth in revenue for the sixth consecutive year. The recording companies are now focusing on widening their reach defying all the geographical and cultural boundaries. With streaming platforms, music has become more connected than ever and this growth has been witnessed around the world.
The record companies are working towards making a meaningful and long-lasting contribution to the world by helping the music industry flourish.
Growth in various music markets across the globe
- The USA and Canada market. The United States is still the biggest market for recorded music across the world. The recording music industry had a growth rate of 7.4% in the USA and Canada region in 2020. Individually, the US market grew by 7.3% and the Canadian market experienced revenue growth of 8.1%. during the year.
- The Latin America market. It has become the fastest-growing recorded music market in the world right now. There has been a growth of 15.9% only in 2020. The streaming revenues in the region grew by 30.2%, which accounts for 84.1% of the total revenue of the region.
- Asian market. The Asian recorded music market grew by 9.5% while the revenue of the streaming platforms overpowered the 50% share of the total revenue of the entire region. As an exception, Japan experienced a decline in the recorded music industry of 2.1% in revenue. Asia could have been the fastest-growing region in the world if not for the decline in Japan’s music scene.
- The African and Middle East market. The revenue in recorded music in these two markets has increased by 8.4%. The growth had been driven mainly by the North Africa and the Middle East regions. The revenue of the streaming platforms increased by 36.4%.
- Europe market. The second-largest recorded music market witnessed revenue growth of 3.5% and 20.7% in streaming in 2020.