Following the financial fallout from the COVID-19 pandemic and its pause on in-person programming, the dance music industry is back and better than ever. Data from the 2023 IMS Business Report demonstrates the resiliency of the global dance music industry, which grew by 34% in 2022 to reach a valuation of $11.3 billion — a 16% increase from the pre-pandemic period. In 2019, the global dance industry was valued at $8.7 billion.
“This is not just about bouncing back; this is bouncing back and almost bouncing off the trampoline,” said Mark Mulligan, managing director and analyst at MIDiA Research. In addition to authoring the report, Mulligan presented its key findings at IMS Ibiza on April 26.
Pent-up demand for live events — a direct result of the quarantine — prompted clubs and festivals to emerge as the primary revenue driver. Though the industry should “not expect this sort of growth to happen next year and the year on,” as Mulligan cautioned, this part of it will “remain bigger and more established than it was before.”
Notably, dance acts accounted for 39% of all festival bookings in 2022, up 6% from 2021. Conversations around equity in the dance space remain critical, considering that female DJs represented just 15% of the top 100 DJ bookings (across festivals and other events), down from 21% in 2021. Their male counterparts made up the rest (85%) of the bookings.
After festivals and clubs, hardware and software was the next largest — but also the slowest growing — revenue source. Meanwhile, music rights (recordings and publishing) expanded by 14%. Publishing was found to outpace recording, with publishing revenue growing more than two times faster than that of its counterpart. Improvements in the rates paid to publishers and songwriters have enabled better equity in the music business for these subgroups and are partly responsible for the expansion of publishing.
When it comes to recorded music (valued at $31.2 billion), global revenue increased by 7% in 2022, translating to a rate of growth slower than in 2021 (25%), but still strong. This increase is made more impactful by cost-of-living crises and geopolitical concerns, per Mulligan. Of recorded music’s $31.2 billion standing, streaming accounts for the largest piece of the pie ($20 billion), followed by physical ($4.4 billion), digital ($1.1 billion) and other ($5.7 billion) formats.
In the streaming context, Spotify continues to lead market share at 30.5% (187.8 million subscribers). while Apple Music and Tencent Music trail at 13.7% (84.7 million subscribers) and 13.4% (82.7 million subscribers), respectively.
It’s worth noting that Spotify makes up less than a third of global music subscribers. The United States, Germany and the United Kingdom are the three countries with the largest bases of monthly Spotify listeners; however, they are also three of the world’s biggest music markets.
Per MIDiA’s research, streaming is currently enjoying the strongest growth in emerging markets, particularly China. Moving forward, fellow developing markets like India, Indonesia and Thailand will serve as the “engines” of streaming growth, according to Mulligan, as streaming continues to level the playing field in a way not previously possible in the pre-streaming period when physical formats prevailed.
“In the past in the traditional recorded music business, revenues were big where people had good amounts of money to spend [on] CDs or vinyl… so as a consequence, the richest nations were the ones that shaped the music business,” Mulligan explained.
Though music streaming continues to expand, MIDiA anticipates that non-digital streaming platform (DSP) sources, like TikTok, Twitch and Matter, will serve as channels of post-streaming growth that will augment music revenue in the future. TikTok’s impact on the music ecosystem has been well-demonstrated and is reaffirmed by the report. As of March 23, average daily video creations hashtagged with #ElectronicMusic have risen by 113% since June of 2022. The same hashtag has amassed 5.9 billion global views.
The IMS Business Report touts TikTok as “the central place for fan engagement,” where electronic music has a healthy presence. This finding is substantiated by the genre’s outperformance of hip-hop on the platform in terms of social follower growth (21% to 2%). This trend also extended to Instagram (19% to 15%), though hip-hop triumphed in streaming follower growth on both Spotify (24% to 13%) and YouTube (11% to 9%).
Unsurprisingly, TikTok is a key contributor to dance music’s robust “creator culture,” which currently boasts “more creators than ever before.” “More people want to stop just listening and start doing,” Mulligan said.
As a result, music software, hardware and proficiency in using both is becoming increasingly valuable, such that it can be considered a “long-term growth area” in the dance industry. The numbers don’t disagree: In 2022, skills sharing and learning were one of the fastest-growing areas in the production and DJing space, with a total valuation of $108 million.
Beyond TikTok, dance-focused companies and organizations that are seeking to reduce or altogether remove traditional barriers to DJing and music production also have a hand in “creator culture.” Beatport’s introduction of its browser-based DJ web application, Beatport DJ, which enables users to DJ from its library of music without the need for hardware or software is one example.
Artificial intelligence (AI) can also powerfully drive “creator culture,” according to Mulligan: “[AI] is going to help more people make music, and it’s predominantly going to help more people make electronic music, so it will act as a funnel bringing more people into making music.”
To view the 2023 IMS Business Report in its entirety, head to https://www.internationalmusicsummit.com/business-report.