Many have been saying for years now that the music industry is headed for its inevitable demise, which will be caused by the internet’s introduction of everything from free, illegal downloads to the new streaming revolution. It’s looked grim for a while, but thanks to new technology and a shift in public tastes, there may be hope for the scene after all.
According to a new report that looks back at 2015 by the IFPI (the International Federation of the Phonographic Industry), the global music industry witnessed some small growth for the first time in two decades, finally signalling what might be a very-necessary turnaround in fortunes.
Revenues across the industry and across borders grew by 3.2% in 2015, and while that might be a small figure, any bit of good news is welcome with open arms by a business that has seen money disappearing for a long time. The total global recorded music industry is now worth $15 billion, and that number might very likely continue to climb.
While certainly reason to celebrate—if only slightly—$15 billion is still down from just a decade ago, when the entire business was worth an additional $5 billion. In those ten years, piracy has become rampant, digital downloads overtook sales of physical singles, the album began to tank, and finally and more recently, streaming has taken over. While $15 billion might be much smaller than $20 billion just a few years prior, it is of course a bit larger than the $14.5 billion the industry was estimated to be worth last year. In fact, the industry hasn’t hit the $15 billion mark since back in 2009, when it was hovering around $15.7 billion.
Money being made in the digital space is responsible for the growth, with revenues rising an impressive and notable 10.2%. That jump, which was worth about $6.7 billion, is thanks to the massive (and still growing) adoption of streaming, which seems to increase by unbelievable leaps and bounds every single year. In 2014, revenue from the physical and digital realms were equal at $6.1 billion, but 2015 saw the digital space overtake physical for the first time, and it now accounts for 45% of all revenue.
Revenue from all streaming services and all of the different types of streams (both those from paying customers and the ones that listen for free on ad-supported networks) shot up over 45%. Digital downloads are still worth slightly more than all of the collective streams around the world (45% of all digital receipts versus 43%, respectively), but don’t expect that to last very long. Nothing has ever grown as quickly as the streaming industry in music history, at least not in the U.S. In 2015, The number of total streams leapt 93% to 317 billion—many times greater than all sales of singles and albums combined.
The remaining cash earned by the music industry around the world comes from a few sources, including synchronization and performance rights, but both of those were only responsible smaller (though growing) percentages of the overall total.
