“Free” music streaming brought in $4.6 billion for the recording industry in 2021… and other key findings from the latest IFPI Global Music Report

In the MBW Review, we turn our microscope to some of the biggest events in the music business in recent times. This time we crack the numbers from the IFPI‘s newly released 2021 Recorded Music Industry Report. The MBW Review is powered by Instrumental.

The global recorded music industry saw an increase in wholesale revenues $4.0 billion in 2021, according to the latest IFPI Global Music Report (GMR).

This was a significantly larger year-over-year increase in global industry sales than we would expect in either 2020 (+$1.5 billion) or 2019 (also +$1.5 billion).

In fact, it was a bigger year-over-year increase than at any time in the past two decades, according to IFPI data.

This was just a reveal of IFPI’s GMR – you can read the preview version of that through hereand the full version that you can buy through here.

MBW has spent the last few hours analyzing figures from the IFPI report (and previous reports) and gleaning some other key insights the release reveals about today’s global music market.

For example, did you know that ad-supported streaming services (including video services) brought in almost as much money for the record industry as physical sales last year?

Or that the ARPU (Average Revenue Per User) of paid music streaming services is actually that high increased (a bit) in 2021?

Did you know that the total revenue of the global record industry last year – $25.9 billionaccording to IFPI – was the greatest in history? But that this feat crumbles a bit with inflation?

Read on to learn more about these insights and other delicious data…

1) Ad-supported streaming generates nearly as much revenue as physical formats for the global industry, growing by $1.1 billion in 2021

Obviously enough with a 4 billion dollars Despite year-over-year industry revenue growth, 2021 saw more than a few highlights for the record business.

One of those highlights, for example, was annual paid streaming revenue, which skyrocketed $2.2 billion to $12.3 billion last year.

This annual total was more than double the amount of revenue generated from paid streaming as recently as 2017 ($5.2 billion).

“Ad-supported streaming platforms (including video services) generated $4.6 billion in 2021, based on IFPI figures, according to MBW calculations — a 31% increase from the previous year.”

There was also good news from the physical formats – CD and vinyl combined – which boosted their retail revenues $5.0 billion in 2021, from $4.3 billion in 2020…and halting a long-running pattern of annual declines.

But perhaps an undersung part of the industry deserves the spotlight for a second: ad-supported streaming platforms (including video services) are generating $4.6 billion in 2021, according to MBW calculations based on IFPI figures.

That was over 31% year after year (vs $3.5 billion in 2020), an annual increase of $1.1 billion.

Not bad for a segment of the market that many still refer to as “free” streaming, which includes the freemium tier of Spotifyplus youtubeVideo Ads Business by .

2) Not good: Paid streaming user growth is slowing down. Good: The ARPU increases (somewhat)!

A key figure revealed in IFPI’s latest GMR is that the number of paid music subscription account users worldwide has officially surpassed half billion brand in 2021.

According to IFPI there was 523 million users of these accounts in the year. (That’s “users” and not “subscribers” because that number counts both individual subscribers and additional users of paid Family and Duo accounts on Spotify.)

This figure of 523 million had increased by 80 million compared to 2020, but this number was lower than the annual increases in both 2020 (+98m) and 2019 (+90m).

“That number of 523 million was up 80 million from 2020, but that number was lower than the annual increases seen in both 2020 and 2019.”

However, there is an industry benefit from this slowdown: if we take the IFPI’s paid subscription revenue Image ($12.3 billion in 2021) and compare to the total number of paid subscriptions user in the year (523m) we can calculate an approximate global ARPPU (Average revenue per paid user).

In 2021, that number came out at $23.52 per year or $1.96 per month. That was slightly more than the corresponding number in 2020 ($1.90 per month).

And when you’re talking more than half a billion users, that small increase makes a big difference.

3) Here comes China… and Italy… and India… and the Middle East

One of the most notable statistics to emerge today was that the annual revenue from every single country – roughly 70 territories – tracked by the IFPI increased in 2021.

This fact was highlighted today (March 22nd) at a media briefing by IFPI’s CEO, Frances Moore.

Other important facts were also revealed at this meeting.

Adam granite, Universal music group‘s CEO for Africa, Middle East and Asia (AMEA) confirmed that China accounts for more than 100% 1 billion dollars in 2021 for the first time annually in income from the trade in sound recordings.

In fact, Granite found that China was the fastest growing market in the world’s top 10 in 2021 over 30% annual growth.

“In 2021, China generated more than $1 billion in recorded music revenue annually for the first time.”

This moved China up one place (from 2020) in the top 10 global markets to rank 6th, according to the Global Music Report.

There was another change in this top 10 as well: Italy finished 10th on the list, overtaking the Netherlands.

Another revelation at today’s event came from Devraj Sanyal – the MD & CEO of Universal Music India and South Asia – who confirmed that India is generating $219 million for the global record business to rise in 2021 23.4% YoY.

Meanwhile, the IFPI report states, “With exceptional sales growth of 35.0%the Middle East and North Africa (MENA) was the fastest growing region in the world [in percentage terms] in 2021. Streaming soared 95.3% Market share as total sales grew to $89.5 million.”

Apparently the announcement of Warner Music Group‘S forthcoming takeover by MENA’s Qanawat Music – out Monday (March 20) – was pretty well timed.

4) Inflation and don’t get carried away

As you can see in the graphic below – lifted off IFPI GMR – Revenues from the global trade in recorded music reached their highest volume ever in 2021.

the $25.9 billion Sales generated in the year surpassed for the first time the previous global record industry peak of 1999 when they were generated $24.1 billion.

This is a historic milestone.

But IFPI doesn’t shout about it much – because, like colleague Trade org the RIAA beforeit needs to know that there is another angle on this information.

Inflation – the gradual depreciation of a single currency unit – is a current concern for businesses and consumers, with annual inflation at 200% 7.9% forecast for the US market in 2022.

For this purpose it is worth using it reverse inflation to find out what that is $24.1 billion Number from 1999 would be worth late 2021.

The answer: round $39.2 billion.

at $25.9 billion of annual income, up to this full 4 billion dollars Year after year, 2021 gave the global music industry much to celebrate.

But in real (ie, accounting for inflation) terms, if we really want to see the biggest 12 months on record, we still have a long way to go.

Instrumental logo

The MBW Review is supported by Instrumental, one of the music industry’s leading growth teams for independent artists. Instrumental uses data science to identify the fastest growing independent artists on the planet, then offers them funding, premium distribution and marketing support to take them to the next level without infringing on their rights.music business worldwide

https://www.musicbusinessworldwide.com/free-music-streaming-worth-4-6bn-to-the-record-industry-in-2021-and-3-other-key-insights-from-ifpis-latest-global-music-report/ “Free” music streaming brought in $4.6 billion for the recording industry in 2021… and other key findings from the latest IFPI Global Music Report

Fry Electronics Team

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