On the other hand, concerts and publishing houses have seen less volatility and continue to anchor the market, with the former still providing the bulk of revenue. Many of these changes have led to all sorts of new complications. Inside the results, all three attributed positive growth trends to streaming, but pandemic-related lockdowns negatively impacted non-digital revenues, especially in the areas of merchandise, physicals (e.g., CDs), and artist services. The sales of physical music accounted for more than 60% of the global music market in 2010. The state of music industry Many people can say that more artists are becoming independent because of all the unfair contracts and the pressures of belonging to a label. His bylines include Rolling Stone, Alternative Press, Substream Magazine, Nu Sound, and Under The Gun Review, among other popular outlets. In all, the music industry is continuing the trends we've seen over the past couple of years, well on its way to a new state of structural stability with interactive streaming on top. Their work considers the changing trends in consumption, the spread of COVID-19, and many more factors that inform what is happening day to day throughout the music business. The three “major” record labels and publishers have seen industry trends begin to play out in recent earnings reports. It is the fourth consecutive year of global growth and the highest rate of growth since IFPI Further protections are given under law once the work is registered with the U.S. Please contribute… And More, Delivered Right To Your Inbox. With capital pouring into the space, music IP acquisition activity has been hot. Post to Celebrity Access and 100+ Job Boards with One Submission. With annual revenue of over 1.2 billion dollars, and employing over 15,000 people, it looked like the industry was doing better than … The music industry isn’t doing us any […] According to the International Federation of the Phonographic Industry (IFPI), recorded music revenue returned to growth in 2015, after nearly two decades of piracy-driven declines. The State of the Music Industry in 2020. Get The Best Industry News, Data, Insider Commentary And More, Delivered Right To Your Inbox. Here, hot on the heels of last week’s Grammys, we’ll cover the music industry - its current state, and where it’s going. According to IFPI’s 2019 Global Music Report, China was the seventh-largest music recording market, and India was not even in the top 10, despite having the world’s two largest populations. IFPI notes that global streaming revenues grew at a 42% CAGR (compound annual growth rate) since 2015, compared to the entire recording industry’s 9% CAGR. The state of the music industry. Overall, choice is a good thing. To get the full picture, you have to look at how each segment is behaving individually, and with respect to the other categories. The music industry can be even tougher to break into if you are a woman. Furthermore, the following chart from Goldman shows how little is currently spent per capita on music in emerging markets relative to developed markets. For example, Live Nation, a leading live entertainment company, experienced a 98% year-on-year revenue decline in Q2 2020, driven by global concert shutdowns. At the start of the pandemic, audio streaming saw a decrease in listening hours as consumers drove less and focused on other platforms (e.g., video streaming) and forms of entertainment (e.g., TV and video gaming). To say that the future of music is bright would be an extreme understatement. Instead, we want to take a look at challenges that are impacting the music market as a whole. Clearly, that’s a subjective question. Members can also instantly access FREE Box Office Scores, dates of live bands on tour, artist avails and news archives. But whether you embrace it or not, over the past 50 some years, traditional forms of monetization in the music industry have changed or disappeared altogether, with new mediums popping up in their place. Do not listen to the prognosticators, including me, if they tell you X is dying or Y is the future. Shifting your mindset in defining success is key. In short, the M&A market is very active, with BMG’s CEO Hartwig Masuch even calling the current environment “a feeding frenzy.”. Unfortunately, there are so many flaws in the music industry and there is no one right way on how to make it to the top. The music industry consists of the companies and independent artists that earn money by creating new songs and pieces and organising live concerts and shows, audio and video recordings, compositions and sheet music, and the organizations and associations that aid and represent music creators. In 2015, the global music market was worth $33.87 billion and is expected to reach a value of $43.39 billion in 2020. Lower advertising spending has also impacted terrestrial radio, although the pullback may be reversing. As a result, royalties paid by radio stations to Performance Rights Organizations (PROs) will likely fall sharply over the next couple of quarters. Before signing the licensing deal, the NMPA claimed that approximately 50% of the music publishing market was unlicensed with TikTok. 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The state of the music industry. If you learn the basics of … In a future article, I will go deeper into the asset class of royalties and, in particular, why music royalties are considered an attractive asset class in the current market environment. There have been modest disruptions to streaming as a result of COVID-19. Global Music Recording Industry Revenues: 2001-2019 ($ Billion). These licensing deals create exciting new future sources of income for music IP owners. Also in 2015, sales of physical records equaled just $4.98 billion, whereas digital sales far outstripped that, at $7.94 billion. If the album cover isn't any indication, Industry was an 1980's new wave band. It’s not news that the music industry is changing. While it may seem odd to highlight challenges in a market that is, overall, doing quite well, it helps give context to the ebb and flow of money in the music industry: Declines in physical media gave way to the rise of digital, which evolved into streaming services. (Cool song:). “We have no business,” said Harvey Goldsmith when I ask him how things are going. And the lack of physical ownership is enough of an issue to impact adoption of these services, leading many users to download music from other (sometimes illegal) sources, and impacting overall market growth. The music recording industry presents a great example of how businesses must continually transform and adapt to change. Some parts of the industry have been willing to evolve, and some have been more reluctant. Spotify Monthly Active Users (MAUs): 2017-2020 (Q2). Music taste is based on memories, opinions, personalities, and culture. CelebrityAccess provides unparalleled, detailed information on over 50,000 Entertainers, Speakers, Celebrities, and their representatives, as well as, hundreds of thousands of records for venues, agents and managers, including their direct phone numbers and email addresses. The global music market is highly competitive with independent publishing houses, digital music service providers, concert ticket suppliers and even individual artists fighting over consumers. Prominent royalty funds include Hipgnosis Songs Fund, Round Hill Music, Kobalt Capital, Tempo Music Investments, and Shamrock Capital. Recent years have seen several significant deals: Since going public in July 2018, Hipgnosis Songs Fund has also spent more than $1 billion, acquiring more than 60 catalogs. According to the International Confederation of Societies of Authors and Composers (CISAC), publishing collections (performance royalties) increased from €6.5 billion in 2013 to €8.5 billion in 2018. The music industry was characterized by decades of the status quo in terms of how music was distributed and paid for by music fans. The music industry is concentrated and dominated by three main players. Thank you for subscribing to our newsletter. The global music recording industry is back in growth territory again. Share. You would be forgiven for thinking that there was no problem with the music industry, at least in Australia. The combination of capital formation and increased acquisition activity has led music IP valuations to trend upward over the past few years. Its view is corroborated by Goldman Sachs, which projects live music revenue to decrease 75% in 2020 before recovering in 2021 or 2022. Will Page, the former chief economist at Spotify, estimates that the global publishing business – CISAC collections plus estimates of non-CISAC publisher revenues from Music & Copyright – is worth $11.7 billion in 2020. He is also a public speaker known for promoting careers in the entertainment industry, as well as an entertainment journalist with over a decade of experience. After piracy and unbundling drove 15 years of revenue decline, the global industry has returned to growth, primarily due to streaming. Therefore, new entrants and smaller vendors can have a hard time finding their place in the shadow of these giants. If the trend continues, China and India will increasingly grow as a revenue source for the industry. While several streaming services are currently appealing the decision, it could have a very positive impact on composition mechanical royalties for US rightsholders. By Karol Kamiński. Sirius XM, the satellite and digital radio broadcaster, saw total company sales decline 5% year-on-year in Q2 2020, driven by a 34% decline in advertising revenue. The fact is this, there is no one way to do it today. Success in the new music industry is defined differently than before. According to the International Federation of the Phonographic Industry (IFPI), recorded music revenue returned to growth in 2015, after nearly two decades of piracy-driven declines. Most music publishing rights are regulated, and recent regulatory announcements have been beneficial to music IP rightsholders’ interests. The record companies, which went through a phase of consolidation, to now become the 4 major records labels of Sony, Universal, Warner, and EMI, controlled access to the music that fans wanted to hear and they controlled that access tightly via the business … But when we’re talking about markets and how they work, all this choice has the effect of splitting the vote and dividing up consumers’ disposable income between both large and small entities. Related Items: music industry. Most of 2020 has been a disaster, but the ever-resilient music industry is finding a way to continue growing in spite of the global pandemic. In 2015, the global music market was worth $33.87 billion and is expected to reach a value of $43.39 billion in 2020. Music industry revenues have held up relatively well compared to other industries during the COVID-19 pandemic. Several positive catalysts for music IP rightsholders are currently on the horizon, including: There are new licensing opportunities for music IP owners that are just starting to emerge. Copyright provides its owner(s) with exclusive rights for a period of time. The article will review the main levers that active investors use when attempting to increase music IP’s value, the potential pitfalls to look out for, and the instruments used for IP investing. Share. The state of the music industry As streaming continues to take a greater share of sales, the majors’ operating margins will benefit. 2020: State Of The Music Industry. Indeed, the modest decline in engagement measured by listening hours has not impacted consumers’ willingness to pay for audio streaming. Thank you, you are now enrolled to receive our daily ENCORE Newsletter in your inbox. Some success stories of people who have used these principles. According to Music & Copyright, the three largest record labels – Universal Music Group (32% market share), Sony Music Entertainment (20%), and Warner Music Group (16%) – hold a 68% share of the music recording market. Live Nation management expects concerts to return to scale by summer 2021. Posted on August 10, 2012. Furthermore, streaming and digital download margins are roughly 50-60%, compared to physical margins of 40-50%, lower due to manufacturing and distribution costs. Hopefully, this blog site will help establish communication between producers, engineers, labels, artists and others. Music as a whole is still making money. The global music recording industry is back in growth territory again. The influence of the U.S. spreads far beyond the country's borders, securing its place as a trendsetter of the global music industry. Music royalty fund formation has increased significantly over the past several years. Email. For more information on these challenges, as well as key trends and a complete breakdown digital music, physical music, concerts, and music publishing, Top 10 Condom Brands Leading the Global Condom Market 2020, Top 10 Largest Beer Companies and Their Beer Brands in the Global Beer Market 2020, Top 15 Sports Shoes Brands in the US Athletic Footwear Market 2019, Top 10 Cosmetics Companies in the World 2020, Largest TV Manufacturers in the World by Market Share 2020, Top 20 Packaging Companies Leading the Global Packaging Industry 2020, Top 13 Companies in the Global Breast Implants Market 2019, Top 18 Offshore Drilling Companies in the World 2019. All Rights Reserved. Music – including lyrics, composition, and sound recording – is protected under copyright law. Examples include Universal Music, Sony Music, Warner Music Group, and BMG, to name a few. One argument that you tend to hear from people who are reluctant to adopt music streaming services is that they don’t like the idea of their collection just existing in the cloud somewhere. Of the 12% of songwriters who are women, only 26% have worked more than once in … YOUR MORNING COFFEE #12: State Of The Music Industry, Spotify Botting & More. Welcome to “State of the Music Industry”. Lucky for us, they’re allowing us to share their insights with you. The growth of digital streaming has allowed consumers to access and enjoy music regardless of social distancing restrictions. The music industry is also subject to reductions in advertising spending that are happening worldwide. In order to understand the dynamics of the music industry, it is first of all necessary to recognize that the music industry is not one, but a number of different industries that are all closely related but which at the same time are based on different logics and structures. While 2020 has been a… challenging year for the music business, certain aspects of the industry have found a way to endure and, in some cases, even grow. The International Live Music Conference is a professional event for those working at the top of the concert industry, but for a quick and easy description of the business, please read on… The live music business is a significant multinational industry, employing hundreds of thousands of people worldwide and estimated to be worth more than €25 billion annually (source: IFPI). Copyright Office. (Hypebot) — While 2020 has been a… challenging year for the music business, certain aspects of the industry have found a way to endure and, in some cases, even grow. Although the popular music industry leans Left politically, Bianchi underlines how it is remarkably entrepreneurial and — unlike much of the arts world — has been self-sufficient over the years. Comments. (Photo by Chesnot/Getty Images) Getty Images. 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