An explosion in global music consumption supported by multiple platforms

Digital music in figures

The recording industry is a mixed-format business, offering music fans a diverse range of formats, including not only hundreds of streaming services, but everything from downloads to CDs and vinyl.

Digital music revenues

In 2016, the global recorded music market grew by 5.9%, the fastest rate of growth since IFPI began tracking the market in 1997. This was a second consecutive year of global growth for the industry with revenue increasing in the vast majority of markets, including nine of the top ten. This growth, however, should be viewed in the context of the industry losing nearly 40% of its revenues in the preceding 15 years.

Streaming has been the clear driver of this growth, with revenues surging by 60.4%. With more than 100 million users of paid subscriptions globally, streaming has passed a crucial milestone. It makes up the majority of digital revenue, which, in turn, now accounts for 50% of total recorded music revenues.

Record companies are driving this digital evolution. Even through more than a decade of market decline, they continued their central mission to discover, nurture and promote artists and their music. Alongside this, record companies have built the systems and infrastructure that has enabled the widespread licensing of digital music services and supported their development. They have engaged on a global scale, while recognising the need for bespoke, local approaches to develop new and emerging markets.

Digital revenues overall grew by 17.7% to US$7.8 billion, driven by a sharp 60.4% growth in streaming revenue – the largest growth in 8 years. This more than offset a 20.5% decline in digital download revenue. Streaming now makes up the majority (59%) of digital revenues. For the first time, digital revenues make up 50% of the share of total recorded music industry revenues.

Performance rights revenue generated by the use of recorded music by broadcasters and public venues – grew by 7.0% to US$2.2 billion in 2016. This revenue stream accounts for 14% of the market but remains significantly undervalued.

Physical format revenues declined by 7.6%, a higher rate than the previous year, which saw a decline of 3.9%. The physical sector still accounts for 34% of the global market and is particularly significant in leading countries such as Japan and Germany.