The IFPI has released their oft-quoted annual report on the state of the recorded music industry, and it once again presents a mixed bag for those outside of the top tier of the mainstream music business.
The market and revenue data presented in the IFPI’s annual Global Music Reports are usually regarded as definitive by the media, as the numbers come from an industry body supported by the Big Three music labels. As such, it’s interesting for the data it provides, but also for the spin the major labels put on this annual report card.
The top line this year is that global recorded music revenues in 2020 grew by 7.4% over 2019’s numbers — a number that felt inevitable despite the pandemic as recorded music was largely immune to pandemic lockdown restrictions. This marks the sixth straight year of growth for the industry as streaming revenue has continued to off-set declines in other areas.
The IFPI’s annual Global Music Report continues to beat the drum of a rosy future for streaming, ignoring musicians who are calling for reform.
However, digital downloads continue to shrink at a rate which was not thought possible before. Despite Bandcamp Fridays becoming a viral sensation, the digital downloads that make up a large part of their offerings added up to just 5.8% of the global recorded music revenues in 2020. This number is less than 10% of streaming revenues ($13.4 billion) and less than 1/4th of the revenue generated by sales of physical media like vinyl, CDs and cassettes (a combined $4.2 billion). Digital downloads declined at an alarming 15.7% from 2019 (which the IFPI likes to call “the move from an ownership model to an access model.”) This is even steeper than the free fall of CD sales (down 11.9%).
Vinyl continued a strong showing at 23.5% growth in 2020 over 2019 — an impressive situation when you consider the difficulties in keeping a physical plant running during a pandemic. 2019’s year over growth was just 6.1%. Streaming revenues — which the industry has thrown itself behind — grew by 19.9% even as artists continued to demand better revenue splits of the $13.4 billion in streaming revenue.
Streaming growth is spun as a victory; the celebration of the resiliency and growth of vinyl — a format the industry seems rather annoyed is still alive, despite the fact that it offers significantly better returns for artists — seems rather subdued. The IFPI’s annual Global Music Report continues to beat the drum of a rosy future for streaming, ignoring musicians who are calling for reform.
This year’s report is also a coming out party for the industry’s latest growth strategy: Asia, and a heavy emphasis on the revenue generated from K-pop music. In keeping with the new corporate communications culture, there are also vague, almost new age-like statements about the Summer 2020 protests in America.
It’s again fascinating to read the industry’s spin on Black Lives Matter, at least when the industry thinks it’s only talking to itself. One essay announces that this new corporate culture means there’s no longer any “separation between work and life” (that gem of smiling neo-feudalism comes from Eric Hutcherson, Executive Vice President at Universal) as a result of what it euphemistically calls “shocking incidents” that never once mention George Floyd, Breonna Taylor or anyone else by name.
The IFPI (which stands for International Federation of the Phonographic Industry) is an industry body that forms a kind of kinder, gentler face for the Big Three record labels (Sony, Universal and Warner) and the power they wield. Founded in 1933, they were once the guardians of the British-dominated phonograph industry but as their patrons have become multinational, so has the IFPI’s outlook.
The IFPI’s annual report is broken up into two releases: the Global Music Report executive summary (which we’ve quoted from here) and a larger, 170 page report which they sell for a staggering $21,000 (£15,000), making it probably the most expensive book published in the world this year.
To put it in the new music industry’s terms: how many streams would an artist have to stack up to afford just one copy of the IFPI’s Global Music Report? According to David Lowry’s Streaming Bible, Spotify paid an average of $0.00348 per stream in 2019-2020, so an artist would need approximately 6,034,483 individual streams on Spotify to afford one copy of a document that argues streaming is the inevitable and best future for the music industry.
Photo: an actual ad from Spotify.