Global recorded music revenues grew in 2018 for the fourth consecutive year, reaching $18.8 billion. This figure is up by $2.2 billion from 2017 or 7.9%. Though 2017 revenues grew by a higher 9.0%, the market grew the same in absolute terms in 2018, adding $1.4 billion of net new revenues as in 2017. Since 2015 the total market has increased by 26%, adding $3.9 billion of net new revenue.
Streaming was the key growth driver, up 30% year on year to reach $9.6 billion. For the first time streaming became the major contributor of label revenue (51%). Its growth continues to outpace the decline of legacy formats.
The major record labels retained the maximum share of revenues in 2018, accounting for 69.2% of the total.
Artists without labels changing the recorded music landscape
Changes in global market shares typically move at a relatively slow pace, particularly at a major vs independent level. However, Artists Direct i.e. artists without record labels are changing the shape of the market. Growing nearly four times as fast as the total market Artists Direct ended 2018 with $0.6 billion of revenue.
Artists Direct and Independents together accounted for 30.8% of global recorded music revenue, though this figure is measured on a distribution basis (i.e. Major revenues include independent labels distributed by majors and major owned companies). The independent share of towards the global recorded music revenue based on an ownership share will therefore be higher.
Anyway, Midia reckons that artist-direct revenues accounted for 3% of the global recorded music market in 2018 and that is $643 million in total “growing nearly four times as fast as the total market”. Midia claims that once labels are added in, the independent sector accounted for 30.8% of global revenues in 2018, but stresses that this is “on a distribution basis” meaning that indie labels distributed through major-owned distributors will be counted in the major labels’ share.
Major label rankings remained unchanged in 2018, but the majors enjoyed varying fortunes. The continued meteoric rise of Artists Direct points to market transforming changes that are reshaping the entire business of record labels.
Of the three majors, Universal Music Group was the biggest winner last year, pocketing 31% or $5.82bn of the total $18.8 billion earned by the recorded music industry, seeing its market share increase by 0.6 points to 30.3%.
Warner Music Group also gained 0.6 points and ended the year with a market share of 18.3%. Sony Music lost 1.5 points to end 2018 with a 21% share of the recorded music market.
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