The Spanish record industry resists the pandemic

The battered Spanish record industry It is resisting, with not a few jobs and difficulties, the blow of the covid-19 pandemic. Clinging to the pull of subscription services to streaming platforms‘(Spotify, Amazon Music, Apple Music, Deezer …), the market managed to close the unfortunate 2020 with a growth of 4.4% (Total revenue was around 354 million euros, compared to 339 million in 2019), which represents a significant slowdown in the rate of continued expansion experienced in recent years but allows the industry to save furniture. The sector most affected, as is logical, has been that of the sales of music in physical format, that have been greatly affected by the restrictions imposed on businesses.

According to the data provided by Promusicae, the entity that represents more than 95% of Spanish record companies, the digital market grew by 22.2% last year and it already accounts for 73.2% of the recorded music business in our country. This increase is due exclusively to the strength of ‘streaming’, since other concepts, such as permanent downloads of musical content and the sale of mobile products, proved to be in clear recession.

A lower rate than expected

Surprisingly, in the first months of strict confinement, there was a decrease in the consumption of streaming music in the ‘premium’ mode (that is, paid) in Spain, a phenomenon that experts can only attribute to the climate of concern regarding the economic situation that settled in the society. With the establishment of the so-called ‘new normal’, ‘streaming’ recovered, although at a slower rate than expected, and 2020 resulted in a growth of 24.4% (compared to 32% the previous year) and revenues of 250.8 million euros, a figure that alone represents 96.8% of the total Spanish digital market.

In this section, it is interesting to note that, together with paid subscriptions (which rose 13.5% and, adding all platforms, now exceed 3.7 million users), ad-funded audio is gaining weight, a business area that saw its income grow by 81.5% last year thanks to the increase in the use of music on social networks (Tik Tok, Instagram, Facebook or Snapchat) and, above all, the rise of podcasts.

Losses of 50 million

On the weak side of the sector is the physical market, which in 2020 prolonged its unstoppable contraction process, further exacerbated by the temporary closure of stores. Revenues of just over 55 million euros represent a drop of 24.5% compared to the previous year, a decrease led without honors by the CD, whose sales decreased by 35.5%. In this difficult context, it is worth considering an achievement (minor, but remarkable) that vinyl records will hold the type and, despite the restrictions derived from the health crisis that undoubtedly slowed their tendency to recovery, they managed to complete the year with a positive, although almost negligible balance (18,424,000 euros generated compared to 18,353,000 in 2019).

To the collapse of physical sales is added a drop in collection for collective management rights (37.1 million, 27% less than the previous year), caused by the closure of bars, restaurants, nightclubs and concert halls, with which the sector estimates that the total losses attributable to the measures adopted to face the pandemic was around 50 million euros. Even so, the year could be saved. The definitive recovery, however, is still a long way off.

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