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What does the IFPI’s report tell us about the state of music after the last year?

IFPI’s Global Music Report has shed light on the facts and figures that shaped the global music industry in 2020. Despite all the havoc wrecked by the COVID-19 pandemic, the global recorded music market grew by 7.4% – marking the sixth consecutive year of growth. 

The total industry revenue of US$21.6 billion was driven by the lucrative streaming sector – particularly paid subscription streaming – which grew 19.9% and reached the astounding figure of $13.4 billion. Unsurprisingly, physical sales decreased by 4.7%, while revenues from performing rights and sales suffered a 10.1% decline as a result of the pandemic. 

In this article, we’re highlighting some key points from this report. We also explore a few less discussed but equally interesting findings. 

Vinyl sales continued to rise

Vinyl is not going away anytime soon. Sales grew 23.5% last year – compared to 2019’s 6.1%, making it a pandemic-proof physical format. 

Artists from across the globe are leaning into this physical platform. Indie artists, in particular, are using different vinyl versions of the same record to amp up sales and actually chart, e.g. Idles’ “Ultra Mono” was the fastest-selling vinyl of 2020 in the UK and managed to secure the number one spot in a pop-dominated chart. Fans are keen to buy the same record twice, as vinyl releases are collectables that enable fans to own aesthetically pleasing records that offer a tangible, artistic experience. Furthermore, artists tend to drop limited copies of their records on vinyl, driving up their value.

An increasingly globalised market

It’s safe to say that 2020 has highlighted the undeniable fact that the music industry, powered by streaming and global technologies, is becoming increasingly globalised. Recorded music revenues grew in every region. 

  • Latin America has secured its position as the fastest-growing market (+15.9%), with Brazil dominating the Latin American market. Money generated via streaming accounted for 84.1% of the total revenues. 
  • Asia‘s total revenue increased by 9.5%. For the first time ever, digital revenues encompassing 50% of the total income. Japan – Asia’s biggest music market – saw a decline in revenue, but overall, Asia is still one of the fastest-growing regions in the world. K-Pop and South Korea saw their biggest year ever with a 44.8% growth. 
  • For the first time ever, Africa and the Middle East were featured as a region in this report. MENA (the Middle East & North Africa) drove the region’s overall sales – with an 8.4% increase, driven by the domination of streaming platforms. 
  • Europe, the second-largest recorded music region, saw a 3.5% overall increase. Streaming continues to offset the decline in physical and performance sales. 
  • The world’s biggest market – the US & Canada – grew by 7.4%, with Canadian recorded music revenue increasing by 8.1%. 

Sync deals and the pandemic

The pandemic had a significant effect on sync revenue. Due to production delays and movie release dates being constantly pushed back, synchronisation revenues declined by a staggering 9.4% on a global level. As music-adjacent industries start to bounce back due to vaccinations and rapid testing, sync revenue is projected to recuperate in 2021. 

The phenomenon of music catalogue sales 

Music catalogue sales were all the rage in 2020 and show no signs of stopping. Bob Dylan’s reported $300 million catalogue sale has ushered an era of catalogue selling by world-renown musicians such as Neil Young and Stevie Nicks. Music catalogues have been transformed into recession-proof stocks, with companies such as Hipgnosis Songs Fund buying catalogues that include songs that stood the test of time and offering investors the chance to make money from royalties. Expect to hear more Bob Dylan, Stevie Nicks, Blondie, Imagine Dragons and Calvin Harris in ads and movies, as these artists (and many more!) have already sold their back catalogues. 

The BTS Impact

The K-Pop industry is revolutionising the global music industry. The seven-member South Korean boy band BTS have managed to score the number 1 spot in the Top 10 Album All-Format Chart of 2020 with their album Map of the Soul: 7. In its first week, the album went straight to number one on the US Billboard 200 with 422,000 album-equivalent sales, marking the biggest first week for an album in 2020. BTS, driven by their team at Hybe (formerly Big Hit Entertainment), have managed to take over the streaming world and break the American market. 

Asian artists’ potential to break the Western music market has been summarized by Shridhar Subramaniam (Sony Music’s President, Strategy and Market Development, Asia and the Middle East) who commented, “We should no longer look at Asia as one giant block, it needs to be broken up into hubs: Greater China, Korea, Southeast Asia, India and the Middle East. Each is an economic powerhouse with vast populations, but they’re also very different both culturally and economically and in terms of the evolution of the market and the internal market dynamics.” He continued, “Once you do that, the next step is to empower these hubs to become significantly powerful entities in their own right.” 

Rise of African Music

The rise of non-Western artists was also noted by Simon Robson, (President, International, Recorded Music, Warner Music Group), who analysed the growth of the African music market. He now sees African artists and the African diaspora’s potential to make it globally. Robson said, “K-Pop continues to make great strides, of course, but I would argue the most exciting development this year has been how African music and African artists have been embraced by fans worldwide.” He continued,” In the case of Warner, we have Master KG with Jerusalema, which has been a huge global hit, and Aya Nakamura, the French singer whose music draws on her Malian heritage, signed to Warner Music France, has also been incredibly successful.”

Social Justice 

2020 proved to be a game-changing year when it comes to social justice. The Black Lives Matter Movement, which spread globally, as well as the U.S. Elections, had a ripple effect on a global music industry that was tone-deaf for decades to the plight of the global south and ethnic minorities. 

Initiatives such as #TheShowMustBePaused and Blackout Tuesday – the collective protest effort in response to the killings of George Floyd, Ahmaud Arbery, and Breonna Taylor – continued to prove how important the music-social media partnership is and how this is going to continue inspiring social justice efforts in the 2020s. 

Eric Hutcherson, Executive Vice President at Universal Music Group, emphasised the importance of global companies such as UMG taking action and instigating real change within their organisations. He said, “My goal is to drive meaningful change towards making this a more diverse and inclusive industry that recognizes both our differences as well as our commonalities.” Hutcherson also commented on the importance of developing Universal into a partner for artists that want to make a real difference in the world. 

Major labels are also becoming more involved in politics. Towalame Austin (Executive Vice President of Philanthropy & Social Impact at Sony Music Group) was one of the key team members that were instrumental in launching the “Your Voice, Your Power, Your Vote”, which saw Sony mobilising more than 80 of their artists to encourage people to get out and vote. Sony is also supporting High School music programmes and grassroots philanthropic organisations. These humanitarian action forms part of Sony’s vision to influence other societal sectors through its artists and employees. 

Conclusion

The strong foundations of the digital era have ensured that, despite the exceptional circumstances that characterised 2020, the global music industry has continued to thrive and develop in unexpected and game-changing ways. By recognising the power of non-Western music markets and harnessing the reach of new digital platforms, record labels and their artists have continued to find innovative solutions for global challenges.

Photo by Mika Baumeister on Unsplash

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