By Emmanuel Legrand
With four of the top five music markets posting significant revenue growth in 2019, the global music sector is expected to register its best year since the previous 2001 peak, thanks mostly to ongoing growth income from streaming, driven by a steady adoption of subscription services by consumers around the world. [Global trade body IFPI will unveil 2019 recorded music figures on March 24.]
> USA: streaming revenues up 20%
In the world's largest market, the United States, the Recording Industry Association of America reported that US recorded music revenues grew by 13% to $11.1 billion in 2019 at estimated retail value, with total revenues from streaming up 20% to $8.8bn, accounting for 79% of all recorded music revenues. The biggest share of streaming revenues came from paid-for services, with more than 60 million subscriptions in the USA.
"Paid subscriptions to on-demand streaming services contributed by far the largest share of revenues as well as the biggest portion of revenue growth for the year," explained RIAA Senior Vice President, Research & Economics, Joshua Friedlander. "Total 2019 subscription revenues of $6.8 billion were up 25% versus the prior year, and accounted for 61% of total recorded music revenues in the US."
Revenues from digitally downloaded music were down 18% to $856m in 2019, and accounted for 8% of 2019 revenues. Revenues from physical products were down 0.6% year-over-year at $1.15bn, with a 12% decline in revenues from CDs to $615m, offset a 19% increase to $504m from vinyl records. "This represents the largest revenues from vinyl since 1988, and 14 years in a row of growth for vinyl albums, but the category only represents 4.5% of total revenues," noted Friedlander.
> Japan: resilience of CDs
The world's second largest market saw a slight drop of 1.65% in overall revenues to 299.7bn Yen ($2.51bn) from 304.8bn Yen ($2.56bn), due to a significant 4.5% drop in physical sales, which had not been offset by a 9.6% growth in digital sales to 70.6bn Yen ($590m), according to stats by trade body the RIAJ.
The Japanese market has long been dominated by CD sales and the 2019 figures show that CD sales have started a downwards trend, while audio and video streaming revenues on the rise. However, CD sales still represent 69.9% of the total (71.9% in 2018), while streaming revenues went up from 14.6% to 19.3% of total revenues.
This contrasts with the USA, where physical sales only represent 20% of the total while streaming accounts for 79%. "Audio streaming revenues in Japan nearly doubled just in the two years between 2017 and 2019. CD, though, very much remains king of the market," noted MBW.
> UK: over 114 billion streams
The UK, which ranks third in the world, has seen music sales going up 7.1% to £1.41bn ($1.81), according to British trade body Entertainment Retailers Association (ERA). Finalised figures for the year have not yet been released by the BPI, but should be in line with ERA's data. Music consumption in the UK was up for the fifth year in a row with the equivalent of 154m albums consumed across streaming and purchasing in 2019, up 7.5% on 2018. Overall, 114 billion streams were monitored in 2019 by the Official Charts Company.
> Germany: streaming taking off
At the fourth largest market, Germany, recorded music revenues were up 8.2% in 2019 to €1.58bn ($1.82bn) on a retail basis, according to the German Music Industry Association BVMI. The German market experienced a 27% increase in audio streaming revenues at €894m ($1bn), representing 55.1% of total revenues, while downloads were down 17.5% year-over-year at €100m (digital revenues, including streaming and downloads, accounted for 64.4% of the total). There were 107 billion streams monitored in Germany in 2019 by Gfk.
The German CD market has shown signs of decline, with CDs accounting in 2019 for 29% of total revenues, as physical formats were down 8.9% (the drop has been mitigated by a 13.3% increase in vinyl sales to €79m, accounting for 14% of physical sales).
“2019 was a very good year," said BVMI Chairman & CEO Florian Drücke. "We are seeing the largest increase in revenues in a very long time, which illustrates the dynamic market in which the industry currently finds itself. Two-thirds of the business has now shifted to digital, audio streaming alone accounts for more than half of the industry’s revenues."
Continued Drücke: "The digital market has been successfully developed and lead to growth in recent years without losing sight of the physical product: The CD remains an important and not to be underestimated market segment with almost one third of total sales, while vinyl continues to grow in its niche."
> France: 15 million streamers
In France, the world's fifth market, recorded music sales were up 5.4% compared to 2018 to €772.5m, according to figures release by trade body SNEP. Digital revenues continued to grow and accounted for €394.5m or 63% of the total (excluding income from neighbouring rights and synchronisation), up from 57% a year before.
"These encouraging performances confirm the potential of a new business model based on streaming revenues, the new dominant way to listen to music, in France and around the world," said SNEP.
Streaming revenues were up 23.2% to €368.3m, with subscription revenues accounting for 46% of total revenues. France had 7.2 million subscribers to paid streaming services at the end of 2019, compared to 5.5 million a year earlier, to which can be added 6 million freemium users. SNEP estimates that "more than 15 million" in France access music via audio streaming services. Over 71 billion audio streams were monitored.
CD sales, at €174.1m, were down 12.8%, while physical revenues as whole were down 10% to €255.6m. Even vinyl sales were down 3% year-on-year at €46.4m.
"When you compare it to other countries, you can see that France still has a lot of room to grow its streaming market," commented Olivier Nusse, president of SNEP and CEO of Universal Music France.