The global recorded music market grew by 7.4% in 2020, the sixth consecutive year of growth, according to IFPI.
Figures released today in IFPI’s Global Music Report show total revenues for 2020 were $21.6 billion. The growth came despite the impact of the pandemic and declines in four of five formats tracked by IFPI – downloads, physical, performance rights and sync.
Despite those sector declines, the report reveals that recorded music revenues grew in every region around the world in 2020. Overall growth was driven by streaming, especially by paid subscription streaming revenues, which increased by 18.5% on the prior year. There were 443 million users of paid subscription accounts at the end of 2020.
However, labels will be looking closely at average revenue per user (ARPU) as paid subscribers increased 29.9% year-on-year compared to that 18.5% revenue increase – a worrying gap.
Total streaming revenue (including advertising-supported) grew 19.9% and reached $13.4bn, or 62.1% of total global recorded music revenues. The growth in streaming revenues more than offset the decline in other formats’ revenues, including physical revenues (down 4.7%). Revenues from performance rights declined 10.1%, largely as a result of the Covid-19 pandemic.
The UK market maintained its No.3 position behind the US in first place and Japan at No.2. However, Germany at No.4 is chasing the UK with stronger revenue growth last year of 5.1%.
Revenues in Europe, the second-largest recorded music region in the world, grew by 3.5% as streaming growth of 20.7% offset declines in all other consumption formats. The US & Canada region grew 7.4% in 2020.
At a virtual event, IFPI chief executive Frances Moore noted that – for the second year now – there was no coffee and croissants for the assembled journalists. But she said that the report was full of “optimism” about the industry as it embraced new opportunities.
“Companies have continued to drive new, exciting experiences for fans whether it's gaming, exercise or beyond,” she said.
Execs joined the Zoom to discuss the new trends for the industry.
Dennis Kooker, Sony Music Entertainment’s president, global digital business & sales, highlighted the impact of Travis Scott on Fortnite, Lil Nas X on Roblox and Madison Beer’s virtual gig on TikTok.
“It's very important to recognise that many of the trends were trends that were occurring before the pandemic,” he said. “I think the pandemic and the situation that consumers found themselves in accelerated some of those trends.
“We're seeing a convergence of audio, video and gaming with the user experience that is purpose-built for that experience… If we get this right, ultimately, immersive entertainment is going to be an experience that can continue to grow well into the future.”
Dua Lipa has always been an artist who’s truly committed to being global
Jess Keeley-Carter, SVP, global marketing at Warner Music Group, noted the one million unique visitors for Ava Max’s Roblox appearance.
“We have to be embedded in those platforms 24-7," she said. "Then we can really jump on what's happening without waiting 24 hours for the data to feed through to our systems. That can give us the best possible chance of success and help us turn what would otherwise just be millions of views into millions of fans.
“Ashnikko is an example of an artist where we have really taken our cues from TikTok to build our strategy. We're not just chasing shiny headlines, chasing the new thing, we're actually thinking about how we're tying up the right artists with the right opportunities.”
Keeley-Carter highlighted Dua Lipa’s Future Nostalgia campaign, which famously went ahead despite the pandemic.
“There had to be a discussion between the label and Tap Management about whether or not that should continue and, ultimately, what was decided was that the best thing for fans was to release this incredible new music and bring joy when times are about to get really tough. So we had to pivot everything.”
Despite the restrictions of the pandemic, Grammy winner Dua Lipa made a global impact with major campaign elements including the Studio 2054 livestream, as well as key moments such as dialing in virtually to Big Brother Brazil and her hugely successful duet in Europe with Belgian singer Angèle on Fever.
“Dua Lipa has always been an artist who’s been really, truly committed to being global,” said Keeley-Carter. “Before New Rules broke, we had her going around the world twice. So when travel is not an option, how do you connect authentically with those local audiences? You have to constantly look at ways in which you can make those authentic connections without being able to be in a market.”
Featured as a region in the report for the first time, recorded music revenues in the Africa & Middle East region increased by 8.4%, driven primarily by the Middle East & North Africa region (37.8%). Streaming dominated, with revenues up 36.4%.
We are heavily engaged in the region and we continue to focus on growing the entire African music ecosystem
Sipho Dlamini, CEO, Universal Music South Africa and Sub-Saharan Africa, spoke about the launch of Def Jam Africa and the increasing global success for artists from the region such as Tiwa Savage.
“We are heavily engaged in the region and we continue to focus on growing the entire African music ecosystem, including recorded music, music publishing, live concert production and talent booking, brand partnerships and merchandise,” he said during the Zoom.
“With regards to our physical presence in Africa, we have offices in South Africa, Nigeria, Kenya, Ivory Coast, Senegal and Morocco, and it's because we understand that in order to succeed you have to be there.”
Asia grew 9.5% and digital revenues surpassed a 50% share of the region’s total revenues for the first time. Excluding Japan (which saw a decline of 2.1% in revenue), Asia would have been the fastest-growing region, with growth of 29.9%
“Asia is becoming increasingly influential in the music industry,” said Simon Robson, president, international at Warner Recorded Music. “Asia has been driving a lot of the recent innovation in our industry – livestreaming, virtual gifting and tipping have been long established in Asia.”
Robson also highlighted the “very healthy” physical sales in Japan and South Korea. IFPI recently highlighted the global sales success of Asian artists, including BTS and Blackpink.
Latin America maintained its position as the fastest-growing region globally (15.9%) as streaming revenues grew by 30.2% and accounted for 84.1% of the region’s total revenues.
Simon Robson added: “The pandemic has arguably accelerated change that was coming anyway, from the take-up of livestreaming to the adoption of more flexible working. But I believe that this whole situation is showing the enduring value of a record label. Music has been a much needed tonic for billions of people who've been going through tough times.”
According to the IFPI, the work and investment of record companies has helped lay the foundations for a predominantly digital industry that proved its resilience in 2020.
Record companies have worked hard to make a meaningful, lasting contribution to the world we want to live in
Frances Moore said: “As the world contends with the Covid-19 pandemic, we are reminded of the enduring power of music to console, heal and lift our spirits. Some things are timeless, like the power of a great song or the connection between artists and fans. But some things have changed. With so much of the world in lockdown and live music shut down, in nearly every corner of the globe most fans enjoyed music via streaming.
“Fuelled by record companies’ ongoing investment in artists and their careers, along with innovative efforts to help artists bring music to fans in new ways, recorded music revenues grew globally for the sixth consecutive year, driven by subscription streaming. As record companies continue to expand their geographical footprint and cultural reach, music has become more globally connected today, than ever before and this growth has spread across all regions around the globe.
“With many impacted by the pandemic, and concerned with growing social injustices, record companies have worked hard to make a meaningful, lasting contribution to the world we want to live in.”
Click here for the BPI’s report on the UK market performance in 2020.