Streaming services boosted the music industry’s 2017 bottom line.
2017 saw global music revenues hit $17.4bn in trade values, an increase on 2016’s $16bn total.
According to new research from Midia, the global total is now just below 2008 levels ($17.7bn).
Streaming provides a boost
The main driver of that growth was streaming, which boosted revenue by 39pc year on year, representing an impressive 43pc of all revenues.
Legacy format sales such as CDs, vinyl and even downloads declined by 10pc but the growth for streaming outpaced this dip comfortably.
Universal Music Group held firm on its lead in the major label stakes, securing 29.7pc of total global revenue, followed by Sony Music in second place and Warner Music Group rounding out the big three.
Artists without labels
The fastest-growing segment was not streaming, but artists who are not signed to any particular record label. These musicians typically earn revenue by distributing directly via platforms such as CD Baby and Bandcamp. Companies such as these generated $472m in revenue in 2017, up from $317m the year previous.
Midia said: “Although this does not mean that the labels are about to be usurped, it does signify – especially when major distributed independent label revenue and label services deals are considered – an increasingly diversified market.
“Add the possibility of streaming services signing artists themselves and doing direct deals with independent labels, and the picture becomes even more interesting.”
According to Nielsen Music Research, people in the US spent more than 32 hours weekly listening to music in 2017, up from 26.6 hours year on year. As of January 2018, Spotify had 70m premium subscribers, up from 30m in 2016 and a 5m jump from September 2017. Apple Music had 38m paying customers in March 2018, according to figures from Statista.
Although Spotify dominates the global streaming market, Apple Music is growing at a faster rate in the US – 5pc a month compared to the Swedish company’s 2pc monthly growth rate. This signifies that it could become a major challenger for the crown of most popular streaming platform, considering the general importance of the US market. The popularity and ubiquity of Apple devices in the US is an obvious driver of growth, according to The Wall Street Journal.
Spotify made the leap on to the public stock market at the beginning of April, with a valuation of almost $30bn. The company had previously been negotiating with major labels and artists, who were advocating for a bigger financial return on streaming services.
While deals were reached with all three major labels, artists and songwriters have still criticised Spotify and other streaming services for the rate of compensation they receive for the millions of streams of their work.