Music industry revenue increased 10% last yearsurpassing the peak of cinema sales recorded before the pandemic, thanks to the rise of streaming platforms and the rebirth of vinyl records.
Annual revenue from copyrighted music amounted to $45.5 billion last year, 25% more than in 2021 and double the figure in 2014, according to a report based on data from trade bodies. That compares with cinema’s box office spending of $33.2 billion last year and $41.9 billion in 2019, according to media consultancy Omdia.
“Let’s not kid ourselves: we are in a boom time,” said Will Page, author of the report, former chief economist of the Spotify platform and fellow at the London School of Economics. “The pain of cinema has been the gain of streamers,” said Pagenoting that streamers tended to pay more for music than filmmakers. “If when we first did this exercise in 2015, someone had suggested that music could surpass cinema, we would have laughed.”
Revenue from record labels and their artists was $28.5 billion, up 12% from the previous yeardemonstrating how the industry has taken advantage of the growth in music consumption helped by the popularity of streaming services.
The rest, about a third, went to music publishers and composers, with consumers paying for the music directly, as well as commercial enterprises such as television shows and restaurants.
Physical sales of music, such as CDs and vinyl, increased faster than streaming revenue, with vinyl sales in particular increasing 15.4%. In the United States alone, vinyl will generate $1 billion a year for record labels by the end of 2024 and will soon surpass CD sales, according to the report.
Listen to the founder of Needle: “We are dedicated to enhancing the music listening experience”
Page’s report, an annual study, uses data from the International Federation of the Phonographic Industry, the artists’ organization CISAC and the International Confederation of Music Publishers.
The value of live performances to music arrangers and composers now exceeds that of general licenses, such as those obtained through stores and hotels, demonstrating the extent to which bands and artists tour to make money rather than relying on their old releases to be played in retail and hotel establishments.
Several older bands, such as Oasis, have reformed to take advantage of the rise in popularity of live music, while groups such as Coldplay are playing venues on more nights.
What’s happening in Chile?
In Chile, income from musical collections increased 32.4% compared to 2023ranking 30th in the ranking, which is led by countries such as the United States, France and the United Kingdom. However, CISAC data indicates that Latin America and the Caribbean are the region in the world that is growing the fastest in music collections.
In Spotify’s latest annual report for artists in 2023, Latin America was positioned as the continent where the majority of “super-listeners” were concentrated –a new audience segment determined by Spotify to define those who are more inclined to continue listening to the music of their favorite artists–. Chile took first place.
**How does the article illustrate the concept of “creative disruption” within the entertainment industry, specifically regarding the shift in revenue streams from cinema to music?**
## Music Streams Past Cinema: Industry Hits High Note with 10% Revenue Increase
**Global music industry revenue soared 10% last year, eclipsing pre-pandemic cinema box office sales and marking a significant milestone for the sector.**
Fueled by the continued dominance of streaming platforms and a surprising resurgence of vinyl records, the industry generated a staggering $45.5 billion in 2023. This represents a remarkable 25% increase compared to 2021 and double the revenue generated in 2014, according to a new report based on data from leading trade bodies.
This surge in music revenue contrasts sharply with the cinema industry’s struggles. While global box office sales reached $33.2 billion last year, this still falls short of the $41.9 billion recorded in 2019, before the pandemic significantly impacted theatrical releases.
“Let’s not kid ourselves: we are in a boom time,” states Will Page, author of the report, former chief economist of Spotify, and fellow at the London School of Economics. He highlights a clear shift in consumer spending, noting, “The pain of cinema has been the gain of streamers.” This observation is backed by the fact that streaming platforms often pay more for music licenses than film producers.
**Record Labels and Artists Cash In on Streaming Boom**
A significant portion of the industry’s success can be attributed to the growth of music consumption, largely driven by the popularity of streaming services. Revenue generated by record labels and their artists reached $28.5 billion, marking a 12% increase from the previous year.
While streaming continues to dominate, physical music sales have also experienced a notable resurgence. Vinyl records, in particular, are enjoying a renaissance, with sales increasing by an impressive 15.4%. This trend is particularly evident in the United States, where vinyl sales are projected to surpass $1 billion annually by the end of 2024, eventually outpacing CD sales.
**Looking Beyond Streaming: The Multi-Faceted Revenue Landscape**
While record labels and streaming platforms take center stage, the report emphasizes that the industry’s revenue landscape is more diverse. Around a third of the total revenue goes to music publishers and composers, reflecting payments for direct consumer purchases of music, as well as licensing fees from commercial enterprises like television shows and restaurants.
This multifaceted revenue stream underscores the industry’s adaptability and resilience, demonstrating its ability to thrive in a rapidly evolving media landscape.
The report paints a picture of a music industry that is not only recovering but flourishing.
Driven by the accessibility and convenience of streaming platforms, and bolstered by the nostalgic charm of vinyl, music has cemented its position as a cultural cornerstone and a powerful economic force.
