IFPI Global Music Report 2017

May 10, 2017
IFPI Global Music Report 2017

Revenue from recorded music continues to grow

Last year marked the fastest rate of growth in the recorded music market since 1997, when IFPI began tracking the industry, according to the IFPI Global Music Report 2017.¹ In 2016 the global recorded music market grew by 5.9% to $15.7 billion, marking a second straight year of improvement.

This suggests the start of a recovery for the recorded music industry, which lost almost 40% of its revenues between 1999 and 2014. Growth is largely driven by an upswing in streaming revenues. Artists will hope that their remuneration will continue to grow, now that more legally licensed music is available to listeners than ever before.

Streaming continues to surge

Streaming was once again at the vanguard of growth in 2016, with revenues rising by 60.4%. Streaming services have crossed the threshold of 100 million paid subscribers globally. Streaming now makes up 59% of digital revenue, which itself accounts for 50% of global recorded music revenue, placing streaming itself at 29.5% of the global total.

Physical revenue dipped by 7.6%, but still maintains a significant share of the global picture at 34% of global recorded revenues, with particular strength in the leading markets of Japan and Germany.2 Performance rights and synchronisation revenues both showed modest growth.

Meanwhile, downloads continued to decline, by 20.5% in 2016, as digital listeners increasingly favour access over ownership of music.

Emerging markets

While Latin America continues to be the fastest growing region for recorded music revenue, rising by 12% in 2016 (largely driven by a 57% surge in streaming revenue), China is increasingly a market of focus.

Despite its enormous population, China has never been one of the top ten markets for recorded music revenue, due to systemic piracy issues. In 2016, however, China’s recorded music revenues grew by 20.3%. China is now the twelfth largest market, with a 30.6% rise in streaming. Technological advances, cultural change and a strong government crackdown on piracy mean that labels are giving serious thought to China as a future leading market.

Bridging the value gap

Growth in the global recording industry over the last two years is still hampered by the so-called “value gap” – the discrepancy between the value that user upload services gain from music and the value returned to creators and investors.

The IFPI and other industry bodies continue to voice their criticism of music-focused, user-upload services such as YouTube, which often rely on “safe harbour” rules in the USA and Europe to resist taking licences on the same basis as other online music services.3 Those “safe harbour” rules were introduced to offer protection to passive, online intermediaries (such as ISPs) from liability for copyright infringement.

As a result, although over 900 million consumers used uploaded video streaming services like YouTube in 2016, they returned only $553 million to rights-holders. Contrast this with the 212 million users of subscription audio streaming services like Spotify, which returned over $3.9 billion. This “value gap” resulted in estimated revenue per user of $1 for YouTube versus $20 for Spotify in 2015.


Streaming revenue has overtaken download revenue, but still sits just behind physical revenue. If, however, the trend continues, that will change this year, making streaming the leading format for recorded music revenue.

Progress in emerging markets makes for exciting reading from the perspective of creators and investors, who will continue to try to reduce the “value gap” in 2017.

Ed Weidman, Associate and Thomas Moore, Trainee Solicitor, Simkins LLP

3 May 2017

Click here to view the IFPI’s Global Music Report 2017 in full.

[1] http://www.ifpi.org/downloads/GMR2017.pdf

[2] http://www.musicweek.com/publishing/read/recorded-music-revenues-up-5-9-to-15-7-billion-in-2016/068256

[3] https://www.musicbusinessworldwide.com/ifpis-frances-moore-talks-value-gap-canadian-music-week/

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