The tale of 2021 for the recorded music industry in a nutshell? Absolute stonks.
According to industry body the IFPI, global recorded music revenues grew by 18.5% to $25.9bn. That’s the headline figure from its annual Global Music Report, which was published this afternoon.
This compares to 7.4% growth in 2020, when the Covid-19 pandemic made its first (and hardest) impact on these revenues. 2021 was the seventh consecutive year of growth for label revenues, and the highest annual total since the IFPI has been recording this data.
You don’t need us to tell you what continues to drive this growth. Streaming revenues for recorded music grew by 24.3% to $16.9bn in 2021, and thus now account for just under two thirds of total revenues – 65%.
(Remember throughout this story that we’re talking about recorded music alone: the IFPI’s figures do not include music publishing or live revenues.)
According to the IFPI, there were 523 million users of paid streaming subscriptions at the end of 2021, up from 443 million the year before. That’s just over 18% growth, and 80 million new users in a single year. Note the ‘users’ – if they’re on family plans, they aren’t necessarily paying themselves, but someone is.
Paid subscription streaming revenues grew by 21.9% to $12.3bn in 2021, accounting for 47.5% of the overall total. That means ad-supported streaming revenues were around $4.6bn.
This in itself is a big story, since ad-supported streaming was $2.1bn in 2020 according to last year’s Global Music Report. That’s 119% growth year-on-year for a part of the streaming economy that has often been mistrusted by rightsholders.
Physical revenues also bounced back in 2021, after a long and seemingly inexorable decline. They were up by 16.1% to $5bn, with performance rights (up 4% to $2.4bn) and sync (up 22% to 549.1m) also growing. The Covid hit taken in 2020 is key here, of course.
The IFPI’s report also broke down the revenues geographically. North America saw growth of 22%, Europe of 15.4% and Asia of 16.1%. Meanwhile, Latin America grew by 31.2% and Australasia by 4.1%.
This is the first year the IFPI has split the figures for revenues in the Middle East and North Africa (MENA) and Sub-Saharan Africa. MENA was the fastest-growing region with 35% growth, with streaming accounting for 95.3% of the revenues there. Meanwhile, Sub-Saharan Africa saw growth of 9.6%.
Something we’ll be following up on is the disparity between the IFPI’s 2021 figure of $25.9bn, and consultancy firm Midia Research’s estimate last week of $28.8bn. That’s a big gap, so we’ll be looking into the differences in methodology and what they mean.
Update: Midia has addressed this question in a blog post. It suggests that its figures include “all reported major label revenue” including ‘non-DSP’ revenue from platforms like TikTok and Meta; the masters side of production music libraries; and some D2C revenues for independent artists and labels that “does not get tracked via traditional tracking methods”.
‘Every single market that we report on has growth…’
Ahead of the report’s publication this afternoon, the IFPI held an event in London (simulcast on Zoom for journalists elsewhere) to discuss the report’s numbers and key trends.
CEO Frances Moore was joined by representatives from all three major labels: Universal Music’s EVP, market development Adam Granite and MD and CEO of Universal Music India and South Asia Devraj Sanyal; Sony Music’s president, global digital business and US sales Dennis Kooker and SVP of artist initiatives and business administration Susan Moultrie; Warner Music’s president, international, recorded music Simon Robson and MD, Warner Music South Africa – Sub-Saharan Africa Temi Adeniji.
Konrad von Löhneysen, founder of independent label Embassy of Music, was also part of the labels panel at the event.
“Quite astonishingly, every single market that we report on has growth,” said Moore by way of introduction. “We’re reporting something like 60 or 70 countries. Every single one was in growth.”
Robson identified the key trend he sees in the market. “Music is more globalised than ever. If you look at the Top 100 streaming charts, they are increasingly being filled with artists and songs from all parts of the globe,” he said, citing recent hits from Pedro Sampaio and Anitta as examples from WMG’s Latin American roster.
“I believe the trend of hits coming from across the globe will accelerate as more people in emerging markets sign up to streaming services, and as we get better at introducing this global talent to the rest of the world.”
Sanyal spoke about India, noting its strong growth in 2021, up 23.4% to $219m. “It has more than doubled in size since 2016,” he said, while noting that the country’s potential is far greater than its current 17th place in the IFPI’s ranking of recorded music markets.
Sanyal said that India’s 1.4 billion population, its growing penetration of smartphones and high-speed, low-cost broadband, and the competition between local and global streaming services point to future growth.
“Only about 0.4% of India’s population was estimated to be paid music subscribers in 2020,” he added. Later in the event, he returned to this theme, saying that India will not always be a market so dominated by free streaming.
“You need time in India for people to get used to free [music services] and when they can’t do without it, they are happy to pay,” he said. Sanyal pointed to the fact that younger Indians “are happy to pay 199 rupees for a cup of coffee every day” as evidence that they may pay for music too.
“It’s just a matter of time before we’re able to switch the dial and people go to paid. Is it going to happen overnight? No,” he said. “But I don’t see any reason why this is not going to be a substantial paid market over the coming months and years.”
‘It’s much more than Afrobeats…’
Adeniji talked about another high-potential region that is exciting labels: Africa. She described the global success already being experienced by several Afrobeats artists as “a transformative moment for the continent, and more importantly for creators from the continent”, but also warned that this is just part of the story.
“I think that obfuscates an important point: we have to look at the growth in the Sub-Saharan region from a bifurcated perspective… growth externally, but also growth on the ground,” she said. “It’s important for us to look at this market holistically, as opposed to just looking at this amazing story [of music] coming out of the continent.”
“It’s important for us to know that there is also a lot of work to be done. It’s much more than Afrobeats: there are so many genres we can take a look at, that have the potential to do exactly what Afrobeats has done.”
Konrad von Löhneysen talked about the opportunities for independent labels in this ever-more-global market, noting that Embassy of Music once moved its office to London specifically to be close to retailers, whereas now its business is global by default.
“We needed to have that access to retail. If I would have an artist who had potential in the rest of the world, I would need to find a partner in that territory,” he said, noting the costs and complexity of shipping physical music and handling marketing campaigns. “Now our music is available all over the world.”
Moultrie, meanwhile, reiterated the points made in her appearance at the NY:LON Connect conference earlier this year about Sony Music’s ‘Artists Forward’ initiative, from paying through streaming royalties to legacy artists with unrecouped advances, to analytics tools and wellbeing support.
UMG’s Granite later ran through what his label is doing to support artists – an encouraging sign that the major labels see artist-friendly initiatives like this as an increasingly prominent aspect of their competition, if it’s matched by what they deliver.
‘What we’re doing is developing a new creative format’
Meanwhile, Sony’s Kooker talked technology. “Whether it’s immersive experiences targeted to the development of the metaverse, NFTs or a format that doesn’t even exist today… ultimately our job is to build the infrastructure, and investment in the technology infrastructure, that’s required to take these experiences for artists and turn them into a reality for their fans,” he said.
“Technology like blockchain and cryptocurrency still need a lot of development and legitimacy in the market. Part of our role is to ensure we’re investing in those opportunities, understanding where the marketplace is going, and understanding how artists can engage in these new technologies and opportunities,” he continued.
“Ultimately, what we’re doing is developing a new creative format. This will be a new format that in its most futuristic vision, the artist has almost no boundaries in what they can create.”
Kooker made an interesting point to follow on from this, suggesting that for all the positives of streaming and social media, there has been whatever the opposite of a silver lining is (Music Ally’s words, not his) for music as an artform.
“The art of music has actually gotten shorter and incredibly frequent. So the opportunity here from a creative development standpoint is to bring storytelling back into the mix as a way to reconnect artists and fans in a much deeper and more immersive way.”
Kooker also delivered a warning to anyone in these new fields – frankly it was very clear he was thinking about some of the recent controversies around NFT startups seeming to sell tokens based on music without artists’ or labels’ permission – who doesn’t engage with the music industry and its creators.
“Some of the attitudes and behaviours we see in these emerging areas remind me of the Napster era. Already we’ve seen a couple of instances where you can imagine piracy and consumer fraud on a mass-market level. Those are of concern for us,” he said.
Kooker added that the “anti-establishment feel” in some of these disruptive technologies is embraced by the music industry, but only so far. “It has to be done with the right intent, the right purpose.”
Finally, Granite offered UMG’s view on the trends in the market, reiterating that every region grew in 2021, while adding that “52 markets had double-digit growth, which is remarkable”.
“China is now a billion-dollar market and the fastest growing market in the top 10 at over 30% growth,” he added, while noting that the share of overall revenues for countries outside the top 10 also grew last year – from 19% to 23%.
He also noted that while 523 million users of paid streaming subscriptions “seems like a big number, pay-TV peaked at just over a billion”, and pointed to segments like fitness as offering “a significant opportunity for growth” in the number of people paying not just for specific music services, but also other services that use music.
One question that Music Ally put to the panel during the event was about the new ‘non-traditional’ DSPs – from Facebook to TikTok to Peloton and beyond – and whether their licensing payments to labels are accompanied by data on music usage, in order for those payments to be fairly divided between artists. Unfortunately, the answer focused on the potential of these new partners, but swerved the data query.
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