On April 12, IFPI (International Federation of the Phonographic Industry) released their annual global music report that outlines the state of the recorded music market worldwide and highlights innovation and investment within the industry. The good news is, the report shows a positive outlook for the music industry. There’s still work that needs to be done, though. Check out some takeaways from it.
Streaming is growing. FAST.
Streaming is still the industry’s fastest-growing revenue source. With an increase in revenues of 45.2 percent to $2.9 billion, streaming has grown more than four-fold in the past 5 years. With the introduction of Apple Music, the growth of other platforms like TIDAL and Spotify, music fans have more direct access to licensed music than ever before. Streaming accounts for 43 percent of digital revenues and is close to overtaking downloads (45%) to become the industry’s leading source of digital revenue. 68 million people now pay for premium music services which is up from 41 million in 2014. In 2010, there were 8 million people paying for subscription services.
People still buy music!
Downloads still remain the main source of industry revenue and it accounts for 20 percent of industry revenues. Income was down but I think that people just need more reasons to buy/download music versus just streaming it. I believe that downloads will one day increase again, with the right form of innovation. Full album downloads were worth $1.4 billion which is up from 2011 ($1.3 billion).
The physical format needs innovation. ASAP
Revenues from physical formats declined by 4.5 percent in 2015 which is a lower decline from other years like a 10.6 percent decline in 2013. Physical formats accounts for 39 percent of global music revenue. In fact, it’s the main format for a number of major markets worldwide. We need to rethink the physical format in order to see growth in the area. I have ideas and I think it can grow the sector. I will definitely share my ideas soon.
At the end, innovations in streaming have been a great thing for the industry but we still need innovation with downloads and physical formats. Either way, things are looking up for the music industry.
Read more about the 2016 Global Music Report from IFPI HERE.