According to a new IFPI report, the global recorded music market grew by 5.9% in 2016 to $15.7bn. This was driven primarily by an increase of just over 60% in streaming revenue generated by 112 million users. It is the highest growth rate achieved since the organisation began tracking the market 20 years ago.
Although the report is not exactly quick off the mark given that it is the end of April, the figures support a general narrative that the recorded industry turned a corner in 2016 due to streaming adoption finding its sea legs- a trend already identified by the BPI in relation to the UK market (link to BPI story).
The report also highlighted that despite this, piracy remains a problem, with IFPI and its national groups identifying 19.2 million URLs as hosting infringing content in 2016 and issuing 339 million requests to Google requiring it to ‘delist’ infringing sites.
Director of Economics, at Spotify Will Page, was not exactly backwards in coming forwards to claim that the streaming service was primarily to thank for this growth, commenting: “What Spotify set out to make happen 10 years ago is finally happening. The music industry is growing, thanks to the growth in streaming, and Spotify – as the biggest player in the music subscription space – is driving that growth”.
Page continued: “Spotify’s success story has expanded beyond established markets, with Brazil and Mexico now making up two of our top four countries worldwide by reach. Back when the industry peaked in 2000, Brazil and Mexico were 7th and 8th biggest markets in the world respectively. A combination of increasing smartphone adoption [reaching far more users than CDs ever did] and Spotify’s success makes the potential for these emerging markets to ‘re-emerge’ and to exceed previous peaks”.
Page has a point- digital income accounted for half the global recorded music industry’s annual revenue for the first time last year across 25 markets, increasing by 17.7% to a total of $7.8bn despite a 20.5% slump in paid downloads and 7.6% in revenue from physical formats.
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