Global Music Industry Surges: IFPI Reports $28.6 Billion In 2023 Revenue

The IFPI’s 2024 Global Music Report, released on Thursday, reveals a continued upward trajectory for the global recorded music industry, with revenues increasing by 10.2% in 2023 to reach $28.6 billion.

This marks the ninth consecutive year of growth, driven largely by a surge in paid music streaming subscriptions, which exceeded 500 million for the first time, Variety reported.

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Solid Growth Across All Regions

The report highlights growth in every region, with the U.S. and Canada seeing a 7.4% increase, Europe up by 8.9%, and Australasia reporting a 10.8% rise.

Developing markets also showed strong performance:

• Middle East & North Africa grew by 14.4%
• Asia, 14.9%
• Latin America, 19.4%
• Sub-Saharan Africa, 24.7%.

These numbers suggest that while mature markets continue to expand, the most substantial growth is occurring in emerging markets.

Music Industry Layoffs

Since the close of the 2023 survey period, the recorded music sector has seen widespread layoffs, particularly at major labels like Universal Music Group NV UMGNF and Warner Bros Discovery Inc‘s WBD Warner Music Group, as well as at streaming platforms.

"The reality is that we're at the beginning stages of another transformational event for the music industry," said Dennis Kooker, President of Global Digital Business at Sony Music Entertainment. Kooker pointed to the increasing challenges of music discovery in a world with fragmented audiences, indicating that the industry may need to adapt once again.

AI And Short-Form Content Present New Challenges

Artificial intelligence (AI) and the rise of short-form video content are emerging as key concerns for the industry.

Adam Granite, Universal Music Group's EVP of Market Development, pointed out the company's commitment to protecting artists' rights in the face of AI-driven systems that use music without proper authorization.

"We believe it's perfectly possible to develop and adopt AI technology while also ensuring artists' rights are protected," Granite stated.

Meanwhile, Kooker stressed the need for better monetization of ad-supported streaming services: “We haven't progressed ad-supported tiers in established markets, especially in the worst-monetizing type of ad-supported products: short-clip video platforms that have no chance to lead to paid subscriptions and [can] become primary consumption platforms for many young consumers."

"There's been no evolution of the financial models for free tiers since the beginning of the streaming era, and that needs to be re-examined."

Furthermore, according to the report, the reliance on streaming services for revenue has been both a blessing and a challenge for the music industry.

While streaming has fueled the sector’s resurgence, it has also concentrated power in the hands of a few tech companies, leading to ongoing disputes over fair compensation for artists. Universal Music Group's ongoing conflict with TikTok, particularly amid talks of a potential U.S. ban on the app, exemplifies these tensions.

The Road Ahead

Despite these challenges, the IFPI report offers reasons for optimism. Physical music sales rose by 13.4%, while performance rights revenues increased by 9.5%, indicating that traditional revenue streams still have a role to play in the digital age. Additionally, there is growing recognition of the cultural powerhouses emerging from regions like Latin America, as well as the increasing demand for local artists in various markets.

Leila Oliveira, President of Warner Music Brazil, highlighted Latin America's rising influence, stating, "It's great to see it finally getting the recognition it deserves.”

Read Next:

• Latin Music And Physical Albums Thrive, Here Are The Latest 2024 Industry Trends

Cover image made with AI.