- The global music industry is on a roll, posting record revenues for 2021, up by 20%.
- Growth was driven by a surge in streaming which now accounts for 65% of sales.
- Sales of CDs and vinyl records grew for the first time in 20 years, with vinyl sales increasing by over 50%.
Harry Styles’s latest song, 'As It Was', has set a new Guinness World Record for the most streamed track by a male artist on Spotify in 24 hours. Yet the music industry is anything but ‘as it was’, with streaming, rather than CDs or vinyl records, behind recent record growth.
Global music revenues rose almost 20% last year, driven by a surge in streaming which accounted for 65% of the industry's revenues, according to the annual report of IFPI, the organization that represents the recorded music industry worldwide.
Total streaming revenues rose by 24.3% to reach $16.9 billion. That figure includes advertising-funded streaming and $12.3 billion paid by 523 million subscribers to audio and video streaming services, up from 443 million in 2020.
What is the World Economic Forum doing to measure the value in media?
The Fourth Industrial Revolution has changed the way content is produced, distributed and consumed for media companies, brands and individuals.
The media industry today is characterized by so-called "destination" and "ecosystem" media. The former are content destinations for consumers, while the latter use content as a strategic asset in a bigger portfolio of products and services. They offer relatively low-price media services as drivers to monetize other parts of their business, such as e-commerce, transactions, live experiences, affiliate sales or branded media.
Media production and distribution creates economic value along its sectoral production chains. It also does so through these ecosystems, increasingly owned and managed by "supercompetitors". How should society measure and value their impact?
This project, Value in Media, has spent a year looking at how individual consumers value destination media. It has analyzed business model strategies in the media industry, studied the extent to which these strategies align with people's preferences around payment and data management, and discussed areas for the industry to focus on in improving its value proposition to society.
Building on this research, the project is now in a second phase that attempts to measure the value that ecosystem media generate in society. It will look specifically at:
- A cost-benefit analysis of ecosystem economics in media
- Developing a framework for new indicators of value such as quality, innovation and consumer welfare
- Identifying metrics that better represent the value of media to society, including its contribution to related activities such as retail, e-commerce and consumer industries
Total worldwide music industry revenue set a new record at almost $26 billion. The United States, Japan and the United Kingdom were the top three biggest music markets and The Weeknd’s 'Save Your Tears' was the most streamed single with 2.15 billion streams.
Vinyl makes a comeback
Revenues from all formats except digital downloads grew last year. Sales of CDs and vinyl records grew for the first time in 20 years, up over 16% to $5 billion. Vinyl records were particularly popular, increasing sales by 51.3% (up from 25.9% growth in 2020).
The biggest selling artist in physical formats was Adele whose album '30' sold 4.68 million CDs and 862,000 vinyl records - in both cases double the volumes achieved by her nearest rivals: ABBA’s Voyage (2 million CDs) and Harry Styles’s Fine Line (397,000 vinyl LPs).
Sales growth across all formats was highest in the Middle East and North Africa, up 35% on 2020, while Latin America (31.2%), the US and Canada (22%), Asia (16.1%) and Europe (15.4%) all registered double-digit increases.
Korean boy band BTS topped the IFPI Global Recording Artist Chart, which measures music consumption across all formats in all countries. Taylor Swift came in at number two followed by Adele, Drake and Ed Sheeran.
A recovered industry
“Today’s music market is the most competitive in memory,” said IFPI Chief Executive Frances Moore. “Fans are enjoying more music than ever and in so many different and new ways.
“Today, there are no barriers to entry; anyone can record a song and post it for the world to enjoy,” she added, noting that around 60,000 new songs are uploaded to one leading platform every day, emphasizing, she said, the continuing role of music labels in developing artists.
But it wasn't always like this. A decade ago the industry was in despair as over a third of its potential revenues were being leached away through digital piracy. In 2011, IFPI warned that if nothing was done, digital piracy would cost the European creative industries around $260 billion by 2015.
Fortunately for the industry, governments heeded the warning and file sharing sites either, like Napster, agreed to charge for the content on their sites or, in the case of Sharebeast in the United States, were shut down.
Today, technology is creating new opportunities for the industry, said Frances Moore. “From the metaverse, to in-game content, record companies have invested in the people and the technologies to deliver new, highly creative, and interactive opportunities for artists,” she added.