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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 Cinq Music Group, a technology-driven record label, distribution, and rights management company.
The streaming-led global recorded music industry might be resilient in the face of macroeconomic uncertainty, but it’s definitely not immune.
That’s the key takeaway from a new report from Midia Research, which estimates a dramatic deceleration in recorded music growth last year.
According to the report, published on Thursday (March 16), global recorded music revenues grew just 6.7%YoY in 2022 to reach USD$31.2 billion.
Midia notes that its estimates, which come a few days ahead of the release of record industry body IFPI‘s official annual Global Music Report, marked a significant drop in growth versus Midia’s estimated 24.8%YoY growth for 2021 (versus 2020).
That 6.7% growth estimate for 2022 is also significantly down on IFPI’s own growth figure for 2021, which it reported in March last year to be an increase of 18.5% versus 2020. IFPI reported that global recorded music revenues reached $25.9 billion in 2021.
(Midia says that it includes self-releasing artists and production libraries in its estimates, and also includes the merch and expanded rights revenues of labels.)
Commenting on Midia’s estimates for 2022 in a blog post on Thursday, Midia Managing Director, Mark Mulligan, noted that 2022 “was a year of realignment for much of the global economy, and the music business had to contend not only with the wider trend of the cost-of-living crisis, but also rising interest rates softening music catalogue M+A demand and the long expected streaming slowdown kicking in”.
However, he said that the global recorded music industry’s “modest” growth in 2022, “is testament to the solidity of the recorded music market that, despite these multiple headwinds”.
Mulligan notes further that “the persistent value of music was even more strongly illustrated by music publishing,” which Midia estimates grew by 16.6% YoY in 2022.
As is to be expected, streaming was again the primary driver of global record industry growth, with revenues estimated by Midia to have grown 8.3% YoY, or by $1.5 billion, to $20 billion in 2022 (see infographic below).
Midia pins this deceleration on slowing paid subscription growth in mature markets and a slowdown in ad-supported revenues, which, it says, reflects “wider advertising market dynamics”.
Music subscriber growth was “markedly stronger”, according to Midia, which it estimates was up by 13.7% to 652 million globally.
It notes, however, that the more mature North America and Europe regions accounted for “just a third” of global annual subscriber growth.
Added Midia’s Mulligan: “Emerging markets will become a progressively larger part of global streaming growth, but due to lower ARPU and low shares of Anglo repertoire, the divergence between growth revenue and subscriber growth rates seen in 2022 will become a long-term market characteristic.”
Overall, streaming accounted for 64.1% of all recorded music industry revenues in 2022, says Midia.
Midia breaks out its estimates for major record company revenues, reporting that Universal Music Group added more annual recorded music revenue in 2022 than the other two majors (Sony Music Group and Warner Music Group).
UMG grew its annual recorded music revenue by $0.5 billion in 2022 to reach $9.2 billion, says Midia, giving Universal a 29.5% share of the global recorded music market.
According to Midia’s estimates, UMG’s YoY revenue growth in percentage terms (+6.2%) in 2022 was slower than Sony Music Group’s (+8.7%), with SMG gaining an estimated 0.4 points of global market share.
“Though overall market growth was down in 2022 compared to 2021, 2021 was in many respects 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 estimates that independent labels and ‘artists direct’ (aka DIY artists) both “strongly out-performed the wider streaming market”. The two sectors grew YoY streaming revenues by 13.9% and 17.9%, respectively.
Artists direct (i.e., artists who release without labels, directly via a distributor), according to a Midia, “were the big success story once again”, with their revenues growing by 16.6% YoY in 2022 to generate $1.78 billion of recorded music revenue.
That gave the ‘artists direct’ segment a 5.7% global market share, says Midia, up from 5.2% in 2021.
Independent labels also outgrew the wider market, says Midia, increasing their recorded music revenues by 7.1% YoY, per Midia’s report.
One standout stat: According to Midia’s numbers, ‘artists direct’ revenue plus independent label revenue stood at $10.8 billion in 2022 – bigger than Universal Music Group’s equivalent revenue tally ($9.2 billion).
(Important: Midia clarifies that ‘independent labels’ in its estimates do not include revenue generated by those indie labels distributed by major record companies. This revenue is instead included under the majors’ revenues.)
According to Midia estimates, the combined market share of the ‘artists direct’ 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 the additional revenue from independent labels distributed by major labels.
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 respects a year of artificially accentuated, post-Covid growth, while 2022 was at the opposite end of the scale, with a host of economic headwinds.”
He added: “In this context, 6.7% growth for 2022 could be considered even more of an achievement than the 24.8% achieved in 2021.”
