MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Five Music Groupa technology-driven record label, distribution and rights management company.
The steam-led global recorded music industry may be resilient in the face of macroeconomic uncertainty, but it is certainly not immune.
That’s the main finding of a new report from Midia Research, which estimates a dramatic deceleration in the growth of recorded music over the past year.
According to the report released on Thursday, March 16, global recorded music revenues increased by only 6.7%Annual in 2022 to reach USD$31.2 billion.
Midia notes that its estimates, which come days before the record industry body’s release IFPIofficial annual music report, marked a significant drop in growth from Midia’s estimate 24.8%Annual growth for 2021 (versus 2020).
This 6.7% the growth estimate for 2022 is also significantly lower than IFPI its own growth figure for 2021, which it announced in March last year as an increase of 18.5% compared to 2020. IFPI reported that global recorded music revenues reached $25.9 billion in 2021.
(Midia says it includes self-released artists and production libraries in its estimates, and also includes label merchandising and extended rights revenue.)
Commenting on Midia’s estimates for 2022 in a blog post On Thursday, Midia chief executive Mark Mulligan noted that 2022 “is a year of realignment for much of the global economy, and the music industry has had to deal not only with the broader trend of the cost of living crisis, but also the rise in interest rates dampens the M+A demand for the music catalog and the long-awaited slowdown in streaming”.
However, he said the “moderate” growth of the global recorded music industry in 2022, “is testament to the strength of the recorded music market which, despite these multiple headwinds”.
Mulligan further notes that “the enduring value of music has been even more strongly exemplified by music publishing”, which, according to Midia, has increased by 16.6% over one year in 2022.
Unsurprisingly, streaming was once again the main driver of global recording industry growth, with revenues estimated by Midia to have increased. 8.3% over one yearor by $1.5 billionFor $20 billion in 2022 (see infographic below).
Midia attributes the deceleration to slower paid subscription growth in mature markets and a slowdown in ad-supported revenue, which it says reflects “broader dynamics in the advertising market.”
Music subscriber growth was “significantly stronger”, according to Midia, which it said increased by 13.7% For 652 million globally.
He notes, however, that the more mature regions of North America and Europe accounted for “only a third” of global annual subscriber growth.
Mulligan from Midia added: “Emerging markets will become a progressively larger share of global streaming growth, but due to falling ARPU and low shares of Anglo-Saxon repertoire, the divergence between growth revenue and the subscriber growth rates seen in 2022 will become a feature of the long-term market.”
Overall, streaming accounted for 64.1% of all recorded music industry revenue in 2022, Midia says.
UMG increased its annual recorded music revenue by $0.5 billion in 2022 to hit $9.2 billion, Midia says, giving Universal a 29.5% share of the global recorded music market.
According to Midia estimates, UMG’s annual revenue growth in percentage terms (+6.2%) in 2022 was slower than that of Sony Music Group (+8.7%), with SMG gaining around 0 .4 points of global market share.
“Although overall market growth was down in 2022 compared to 2021, 2021 was in many ways a year of artificially accentuated post-Covid growth, while 2022 was at the opposite end of the scale, with a host of economic headwinds.”
Mark Mulligan, Midia
Elsewhere in its report, Midia believes that independent labels and “direct artists” (i.e. DIY artists) “have significantly outperformed the broader streaming market”. Both sectors increased year-over-year streaming revenue by 13.9% And 17.9%, respectively.
Direct artists (i.e. artists who release without a label, directly through a distributor), according to a Midia, “have once again been the big success story”, with revenues growing by 16.6% over one year in 2022 to generate $1.78 billion revenue from recorded music.
This gave the “direct artists” segment a 5.7% global market share, says Midia, up by 5.2% in 2021.
Independent labels have also outpaced the broader market, Midia says, increasing their recorded music revenue by 7.1% year over yearaccording to Midia’s report.
A remarkable statistic: according to figures from Midia, the income of “direct artists” plus the income of independent labels amounted to $10.8 billion in 2022 – larger than Universal Music Group’s equivalent revenue ($9.2 billion).
(Important: Midia clarifies that “independent labels” in its estimates do not include revenue generated by independent labels distributed by major labels. This revenue is instead included in major label revenue.)
According to Midia estimates, the combined market share of the “direct artists” segment and independent labels reached 34.6% in 2022, up from its estimate of 34% in 2021.
Midia notes, however, that this does not include additional revenue from independent labels distributed by the majors.
Commenting on Midia’s estimates, Mark Mulligan writes in his blog post that although “overall market growth was down in 2022 compared to 2021, 2021 was in many ways a year of artificially accentuated post-Covid growth. , while 2022 was on the opposite end of the scale, with a host of economic headwinds.
He added: “In this context, a growth of 6.7% for 2022 could be considered even more of an achievement than the 24.8% achieved in 2021.”
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