All the key points of the Music Industry Report in two short bullet lists.
If you’re a musician and haven’t read the IFPI’s Music Industry Report 2023, who can blame you. It’s 55 pages long, meaning it offers a wealth of insights about the state of the music industry that can help you more effectively tune your music marketing, but who wants to read 55 pages?
To help you in your music marketing without the risk of falling asleep face down on the rug (or the family pet), here are the salient points of the 2023 Music Industry Report:
The Global Recorded Music Market Grew 9% Overall in 2022, Reaching $26.2 billion U.S.
Streaming accounted for the highest proportion of total music market growth, increasing to 67% from 65.5% the previous year.
- Subscription audio streams accounted for 3% of total music market revenues.
- Ad-supported streams accounted for 7%.
- Physical music sales accounted for 5%.
- Performance rights accounted for 4%.
- Downloads and other digital music formats accounted for 6%.
- Synchronization accounted for 4%.
Though digital downloads were the only format category that saw a decline (down from 3.6% the previous year), here are a few key things to consider with respect to your music marketing:
The record 2022 profits from streaming are largely profits for the major music labels, not artist profits.
As The Hustle reported to newsletter subscribers on April 12, 2023, “The economics of Spotify were designed to benefit labels over artists.” On average (as recently reported by MusicTech), label artists “receive a mere 16% of the revenue share that record labels take from streaming platforms such as Spotify.” The other 84% goes to the majors.
Indie labels tend to offer a much better revenue share (commonly around 50/50), and of course if you release music to streaming platforms on your own through services like DistroKid, you keep 100% of the profits. Yet given how services like Spotify pay a miniscule $0.003 – $0.005 per stream on average, it would take around 1,000 streams (if you release all on your own) just to afford a box of Kraft Dinner. In comparison, you’d only have to sell a few digital downloads or physical copies of your music to make more, and the revenue opportunities are certainly there.
According to the 2023 Music Industry Report, revenues from permanent digital downloads totaled just over $644 million U.S. in 2022. The majors may view such a number as insignificant compared to billions, but any way you slice it, $644 million is still a large number compared to the relative peanuts from streaming platforms. Added to this, revenue from other non-streaming digital formats (including mobile personalization) grew by 12.2%.
So, for all practical purposes in your music marketing, streaming services should be viewed more as an unpaid promotional channel. You may not see any real money. You may even lose money (depending on whether monthly upload service subscription costs are higher than streaming profits), and listeners may not be local (meaning unable to attend one of your live shows), but streaming services can provide you with things to talk about (“We got 1,000 streams!”) if such information is relevant to your music marketing, fans, and the image you want to build.
Recorded Music Sales Growth by Region
Though many artists tend to focus on certain markets when making music marketing plans, music fans naturally live (and purchase music) across the globe, and as the 2023 Music Industry Report shows, music industry revenues grew in each of the world’s top 10 markets.
- Canada and the U.S. maintained top spot as the world’s largest region for recorded music sales, representing 6% of the global market (an increase of 5% over the previous year).
- Europe took second spot with revenue growth of 5%.
- The Middle East and North Africa posted the world’s highest growth rate in 2022 (8%).
- Sub Saharan Africa became the fastest-growing region for recorded music at 7% growth.
- Latin America saw double-digit growth (9%) as it continued a decade-plus trajectory of growth.
- Asia experienced double-digit growth (4%) for the third consecutive year.
- Australasia experienced 1% growth (a growth rate of 4.7% over the previous year).
Takeaway: If you’re an artist who doesn’t seem to have a fan base in one region, that fan base may be somewhere else that you haven’t considered and reaching them may simply be a case of rethinking your music marketing.
Other RCS blogs to help you with your music marketing:
- Social Media: The New Google? That data points in that direction.
- Short-Form Video: Year End Report for Musicians (It was an explosion year.)
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Until next time, stay awesome.
The RCS Team
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