Global Music Industry Marks 10.2% Revenue Increase in 2023

Published March 21, 2024

Last year, the global music industry experienced a significant rise in revenue, climbing by 10.2 percent to the impressive sum of $28.6 billion. While this growth is notable, companies within the record industry express concern regarding the sustainability of this expansion, especially in the age of streaming services.

Top Artists and Music of the Year

Topping the charts as the year's biggest artist was none other than the pop sensation Taylor Swift. Swift's dominance was closely challenged by the global impact of K-Pop, with Korean bands Seventeen and Stray Kids following suit in popularity. The power of music was showcased by the track 'Flowers' by Miley Cyrus, which remarkably surpassed 2 billion streams. Close on its heels were 'Calm Down' by Rema featuring Selena Gomez, and 'Kill Bill' by Sza, both boasting stream numbers in the billions as well.

Streaming Fuels Growth

Streaming continues to be the primary driver of revenue growth within the music industry, with an 11.2 percent increase from the previous year. This digital medium now accounts for a whopping two-thirds of the industry's total global revenue. In another milestone, paid streaming subscriptions leaped to over 500 million, reaching 667 million subscribers for the first time ever.

Physical Sales and Global Spread

Despite the digital age dominance, sales of physical music formats, particularly vinyl records, have also enjoyed growth, increasing by 13.4 percent. John Nolan, the IFPI's chief financial officer, highlighted the broad-based expansion, emphasizing the growth in revenues across various regions and music formats.

Interestingly, the regions with the fastest growth were Sub-Saharan Africa and Latin America, where local music stars and the reach of streaming services have surged in popularity. However, the largest music markets continue to be the United States, Japan, and Britain.

Challenges in the Industry

Despite the positive revenue news, the industry faces challenges with new platforms like TikTok and video games drawing the attention of young consumers, potentially impacting future revenue streams. Sony Music's Dennis Kooker pointed out the difficulties in transitioning users of ad-supported, short-clip video platforms to paid subscriptions. Meanwhile, Universal Music Group's removal of its music from TikTok highlights the ongoing disputes surrounding AI-generated music and song royalties.

Companies are also investigating ways to cater more directly to superfans, individuals who seek deeper connections with artists and are willing to spend more. Another challenge is the low rate of streaming service adoption in certain markets, such as France, where there are also concerns about the impact of new taxes on streaming services.

growth, streaming, challenges