The global recorded music market grew by 8.1% in 2017, its third consecutive year of growth since the International Federation of the Phonographic Industry (IFPI) began tracking the market in 1997, according to figures released today in the organization’s “Global Music Report 2018.” Total revenues for 2017 were $17.3 billion.
Streaming remains the main driver of recovering revenues and, for the first time, has become the single largest revenue source, with 176 million users of paid streaming services contributing to year-on-year streaming growth of 41.1%, according to the report. Streaming now accounts for 38.4% of total recorded music revenue and its growth has more than offset a 5.4% decline in physical revenue and a 20.5% decline in download revenue. Total digital income last year accounted for more than half of all revenue (54%) for the first time.
Although 2017 was the industry’s third consecutive year of growth after 15 years of significant decline, the year’s revenues are still just 68.4% of the market’s peak in 1999. Internationally, Latin American revenues grew by 17.7% and Asia and Australasia by 5.4%.
As it did in past years, the report singles out the “value gap” — particularly with regard to what the organization considers low royalty payments from YouTube — as the largest single threat to the industry’s sustained growth.
It illustrates this discrepancy with a graphic illustrating that the 272 million users of paid and ad-supported audio streams generated $5.569 billion in 2017, while 1.3 billion users of video streams generated just $856 million.
“Record companies remain dedicated to ensuring full and fair value is returned for music as it is consumed in its many different forms around the world,” the report reads. “Crucially, this involves finding a legislative solution to the value gap, the mismatch between the value created by some digital platforms from their use of music and what they pay to those creating and investing in it.
“Inconsistent applications of online liability laws have emboldened certain digital platforms to claim that they are not liable for the music they make available to the public,” it continues. “Today, services such as YouTube, which have developed into sophisticated on-demand music platforms, use this as a shield to avoid licensing music like other digital services do, claiming they are not legally responsible for the music they distribute on their site. Legislative action is needed to ensure that laws on copyright liability are applied correctly and consistently, so that platforms cannot claim they do not need to be licensed to distribute music. The music community is united in calling for policymakers to take action.”
IFPI CEO Frances Moore’s comments reflected both cautious optimism and warning. “It’s been another incredibly exciting year for music. The work and investment from record companies is enabling brilliant, diverse artists to break through to fans around the world, soundtracking their lives and bringing them increasingly rich and immersive ways to enjoy the music they love.
“The industry is on a positive path of recovery but it’s very clear that the race is far from won,” she continued. “Record companies are continuing in their efforts to put the industry back onto a stable path and, to that end, we are continuing our campaign to fix the value gap. This is not just essential for music to thrive in today’s global market, but to create the right – fair – environment for it to do so in the future.”