On Our Radar: Deals we are paying attention to for their impact on industry.
Tuesday was a good day for the recording industry and music streaming services, which are fast becoming the standard way people pay for music. The International Federation of the Phonographic Industry (IFPI) released its annual report showing global music sales were up for the fourth straight year in 2018, and nearly half of all record label revenue came from streaming services.
Total music revenue for the year was $19.1 billion, up 9.7% from 2017. That rate of growth is the fastest since 1997, when IFPI first began watching the industry. It was also the highest revenue total since 2007.
IFPI’s 2019 report also tells the story of the widespread popularity of music streaming, which overtook digital downloads as the predominant way labels distributed music and listeners consumed it not that long ago. Now, instead of downloading music, many users pay a subscription fee to access as much music as they’d like from services such as Spotify or Apple Music.
Paid streaming services were responsible for 37% of total recorded music revenue, while ad-based services accounted for an additional 10% and digital downloads 12%.
Purchases of physical copies of music were down to just one-fourth of all revenues. By the end of the year, it is projected that buying access to music rather than buying physical hard copy recorded music will be the dominant way fans will purchase music.
In the industry publication Music Business Worldwide, Frances Moore, chief executive of IFPI, said the arrival of streaming music has opened up the global marketplace for music. IFPI reports that China, South Korea, and Brazil have all climbed to spots in the global top ten list of music markets. Artists from emerging markets also have more opportunities than ever to bring their music to a worldwide audience, evidenced by South Korean band BTS being a top global artist last year alongside Drake and Ed Sheeran.
Frances Katz is a freelance writer focusing on media, culture and technology. Her work has appeared in The Atlantic, The Week, The Washington Post, USA Today and other publications. She lives in Atlanta.