Who doesn’t love music in some way? Whether it is humming a familiar tune while cruising the internet or singing along to a favorite tune during a commute, music is an all-encompassing industry. From film to the independent artist making a few cents off of Spotify, music is literally everywhere today.
Music Industry Facts
Digital sales of music accounted for 39% of the total revenues of the music industry in the last year.
The biggest gains aren’t seen in digital downloads of music from traditional supplies like iTunes, although those sales are going strong. It is in the music subscription services where the most growth is being realized for artist exposure and revenue generation alike.
Three Key Facts About the Music Industry
1. Music sales in Japan fell by 16.7% in 2013.
2. Recorded music revenues reached an estimated $15 billion last year globally, which is a 3.9% decrease from the year before.
3. Paid subscription services for music increased by over 51% in 2013, exceeding revenues of $1 billion for the first time ever.
Takeaway: What today’s music lovers want is value over physical ownership of music. Having a cabinet filled with old vinyl LP’s is wonderful, but those vinyls take time to load up and begin to play. You can connect a vinyl player by USB to a computer, but you just can’t plug in your headphones and start a playlist! That’s why the music subscription portion of this industry is growing be leaps and bounds and will likely continue to see explosive growth. It increases access to music while still paying artists for their work.
Additional Facts to Consider About the Music Industry
1. The average commission earned by an artist for a song played through a music subscription service is less than $0.01.
2. Revenues from music streams that had advertising included on it saw an increase in revenues of 17.6%.
3. As of December 2013, Vevo was averaging more than 5.5 billion views per month with over 240 million unique visitors globally.
4. 27% of the music industry’s total digital revenues globally is derived from the music subscription or ad-supported streaming services that are available through apps or online.
5. Digital download revenue growth is strongest in countries like South Africa, Hong Kong, and Slovakia.
6. Physical format music, such as a CD, still accounts for a majority of sales that occur in this industry.
7. 28 million people paid for a music subscription service in 2013.
8. In the U.S., the music industry was estimated to generate about 15.5 billion U.S. dollars in 2016.
Takeaway: Access to music is changing and how artists are funding themselves is changing too. Crowdfunding for albums is becoming more normal and the digital formats are such revenue generators that a recent artist recently announced they would release just 1 physical copy of an album and were offered a $5 million advance. Music may not ever change its influence on a person, but how people access that music is definitely changing.