Saturday, May 9, 2020

IFPI: (Source: IFPIStreaming boosted recorded music revenues in 2019

By Emmanuel Legrand

Music streaming has been the driver of growth for the recorded music industry in 2019. For the full year 2019, global revenues grew by 8.2% to $20.2 billion, according to the International Federation of the Phonographic Industry's annual Global Music Report covering 2019. It is the fifth consecutive year of growth after over a decade of decline.

   "The work and investment from record companies continued to drive dynamic growth in diverse music markets in 2019; their global networks supporting artists and their music communities, enabling them to engage with and influence others in exciting ways around the world," said the IFPI.

(Source: IFPI)

  Breaking the revenues down by streams of revenues, the IFPI reported the following figures:
  - Streaming:
  Streaming revenue grew by 22.9% to $11.4bn and for the first time accounted for more than half (56.1%) of global recorded music revenue. The streaming growth was driven by a 24.1% increase in paid subscription "with nearly all markets reporting growth in this area," noted the IFPI. Overall, music streaming services had 341 million paid at the end of 2019, up 33.5% year-over-year. Paid streaming accounted for 42% of total recorded music revenue.
  - Downloads and other digital:
  Non-streaming digital revenues were down 15.3% in 2019, "largely driven by steep decline across multiple markets in download revenues, a format which now accounts for just 5.9% of the total market." This segment accounted for 7.2% of total revenue.
  - Physical:
  Revenue from the physical sales of recorded music continued their decline, albeit at a slower pace than in 2018 (-5.3%). Physical sales represented 21.6% of the total income. Revenues fell at a lower rate than the previous year (-10.3%). Several markets did experienced growth in physical revenues, including the United States (+3.2%), and Spain (+7.2%). Revenues from vinyl rose by 5.3%, and make up for 16.4% of overall physical revenues.
  - Performance rights:
  Revenues from performance rights, or neighbouring rights, for the use of recorded music by broadcasters and in public venues, were down 3.6% in 2019 but the IFPI attributes the decline to "one-off settlements in 2018, which inflated the prior year’s revenues in this area." Compared to 2017, performance rights revenues in 2019 posted a comparable growth rate of 8.7%. They account for 12.6% of total revenues.
  - Synchronisation rights:
  Revenue from the use of music in advertising, film, games and TV represented 2.4% of total income(same as the previous year), and sustained a growth of 5.8%, a drop from the previous year’s rate of growth (+11.6%).

(Source: IFPI)


  There were some regional disparities, but overall, all regions posted growth and saw a rise in streaming revenues (it must be noted that IFPI data made public in this area is scarce, without any revenue figures per region or country). 2019 regional highlights include:
  - North America:
  Revenue in the US & Canada grew by 10.4%, with the US market growing by 10.5%, its fifth consecutive year of growth, while Canada, which was largely flat the prior year, increased by 8.1%. North America remained the largest region for recorded music revenues, accounting for 39.1% of the global market.
  - Latin America:
  For the fifth consecutive year, Latin America was the fastest-growing region (+18.9%) with its three largest markets growing strongly: Brazil (+13.1%); Mexico (+17.1%); and Argentina (+40.9%). Latin America experienced the steepest decline in non-streaming digital revenues, but also "the highest gains in overall streaming growth, highlighting the migration of digital revenues towards streaming formats," said the IFPI.
  - Europe:
  The world’s second-largest region grew 7.2% – after being almost flat in 2018 – with UK (+7.2%), Germany (+5.1%), Italy (+8.2%) and Spain (+16.3%) reporting strong growth. For the first time, the share of digital revenues (streaming plus downloads and other digital formats combined) in Europe crossed 50% for the first time (55.0%). In total, 18 markets posted more than 20% growth in overall digital, with paid streaming in Europe growing by 22.4%. Physical revenues dropped by 8.3%.
  - Asia:
  Overall growth reached 3.4%, a slower rate than 2018. IFPI linked the lukewarm result to Japan market decline in revenues of -0.9%, due to a drop in physical sales (-4.8%). However, because of the size of the Japanese market, physical sales have remain the largest revenue stream in the region (48.5% of the market total), but 2019 was the first time physical’s share fell below 50% of all revenues. Elsewhere in the region, South Korea, China and India all experienced strong growth, (8.2% 16.0% and 18.7% respectively).
  - Australasia:
  Revenue in the region grew by 7.1% with overall digital revenues rising 11.6% and physical format revenues were down 20.4%. Australia, a top 10 market, recorded growth of 6.0% with neighbouring New Zealand posting an increase of 13.7%. 

  Overall, the world’s top ten markets all demonstrated growth, with the exception of Japan. "There was particularly strong growth in paid streaming with all top 10 markets experiencing double-digit growth in paid streaming revenues," said the IFPI.

(Source: IFPI)

  Frances Moore, chief executive of IFPI, commented: “While the numbers we are reporting are a snapshot of the business last year, the Covid-19 pandemic presents challenges unimaginable just months ago. In the face of a global tragedy, the music community has united behind efforts to support those affected. This is a critical and ongoing priority as our member record companies work to continue to support the careers of artists, musicians and employees around the world.”

  [The music sector had a good story to tell in 2019 with the rise of streaming and the resilience of other sources of revenues (save for downloads).
  While it may be too early to evaluate the impact of the global pandemic, the 2019 results will be hard to beat in 2020, since most revenues for recorded music will be coming from streaming performances, rather than physical sales, synch, or neighbouring rights, most likely to be affected by the lockdown of most countries.
  The second half of the year will be crucial. Will paid streaming maintain its growth rate of the hardship fell by many people will lead to a drop in subscriptions? Will there be a rebound from physical sales, in particular vinyl, once record stores re-open and consumers show their appreciation for the format by flocking to stores (but keeping social distancing, of course) to buy their favourite albums? And will artists be able to resume promotion and release new material, a crucial component to keep consumers' interest alive?
  One thing is certain: based on data available, music has remained a vital ingredient in people's lives during the pandemic. Consumers have been digging deeper into catalogue, over 50 year-old have massively embraced streaming and some genres such as classical, country and children music have seen uptakes in streams.
  Hopefully this trend will continue and mitigate some of the disastrous impact of the crisis of people's lives and on the global economy. E.L]

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.