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Global recorded music business to experience continual growth in 2019

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According to the Midia Research, the global recorded music industry will witness a turnover of $18.9bn in 2018 with streaming making up 50.8% ($9.6bn) of the total. The Midia Research published its projected 2018 figures on 18th December, 2018, which is based on a combination of prominent label revenue reports to date. It includes stats from industry organisations and also data from DIY distribution platforms.

The report suggests the recorded music industry’s $18.9bn turnover in 2018 will represent $1.4bn annual growth across all formats, an almost similar monetary increase which was seen in 2017.

“This represents an increase of 8.2% on 2017 which is a slight lower growth rate than 2016–2017, which was up 9%. However, net new revenue ($1.4 billion) – is almost exactly the same amount as one year previously. The recorded music market appears to be settled into a steady, strong growth pattern,” said the report.

Global recorded music market fy 2018- MIDIA

Streaming continues to reign

While the recorded music industry will reflect a positive growth, the report states that the streaming industry, too, will see a significant collection of revenue in 2018. The report mentions that the streaming revenue will rise to $9.6 billion.

“The 41% growth rate of 2017 may be gone, replaced by 29%, but the absolute amount of new revenue generated was, as with the recorded music total, the same as 2017 $2.2 billion. There was enough growth in the big mature streaming markets – the US especially – to ensure that streaming continued to plot a strong course in 2018. Though the fact that total revenues grew by $0.8 billion less than streaming revenue, indicates the pace at which legacy formats continue to decline,” the report confirms.

Revenue contribution from Artists Direct

The report also sheds light on the global revenue contribution of the Artists Direct (Independent Artists, DIY and others) in 2017 and their growth in 2018.

Midia in their report said, “It can be reported that the spectacular growth registered by this segment continued in 2018. Total Artist Direct revenue was $643 million, up an impressive 35% on 2017, i.e. more than three times faster than the market. Unlike the rest of the market, Artists Direct revenue growth is accelerating in both percentage and absolute terms, with market share up from 2.7% in 2017 to 3.4% in 2018. (It’s worth noting that only a portion of Artists Direct revenue is measured by the IFPI. Categories such as at-gig CD sales aren’t captured by either the labels or measurement companies that national trade associations depend upon to measure the market. So, expect the IFPI’s global recorded music total to come in closer to $18.6 billion).”

Going forward

While reflecting on the performance and growth of the music industry in 2018, Midia highlights the key factors to look out for in 2019.

The global recorded revenues will continue growing in 2019. Even if label revenues hit $25 billion (where the market was at in 2000 before the decline) in real terms (i.e. factoring in inflation etc.), that would actually be around half the actual value. While it is not realistic to expect a $50 billion market, getting towards the inflation-reduced $25 billion is certainly a realistic target, the report said.

While streaming has been enjoying a sustainable growth, the Midia report suggests that the  streaming growth will be slow in the mature markets such as US and UK, but the impact will be offset by growth in markets such as Japan, Germany, Brazil, Mexico. Even though there will be an overall market growth, it’ll however be slower.

Lastly, the report states,

“2019 will be a coming of age year for Artists Direct, label services companies, JVs and other alternative models that have been establishing themselves in recent years. It’s never been a better time to be an artist, as long as you and / or your management are clued up enough to know what to ask for.”

 

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