Pictures taken from the IFPI GMR of 2017, page 11
Market Figures Analysis
In order to be accurate please keep in mind that the IFPI hasn’t adjusted its figures to account for inflation. Also, early figures were the direct gross of physical units sold, without factoring in performance rights. In the late 90s / early 00s, the figure to keep in mind is a market of roughly $38 billion in today’s dollar value.
I have often praised streaming and said the market has a chance of returning to its all-time peak worth of $38 billion by 2025. The figure above suggests the market remained around $15 billion, give or take a billion, every year from 2009 to 2016. Should we expect it to remain this way? Absolutely not. While the figures seem flat, the market is fundamentally different now from the one in 2014.
How so? Back in 2014, the evolutions were the same as today. The physical market was tumbling, downloads had started their free fall and streams were booming. The difference is that streams accounted for less than 15% of the total business by 2014, so even 50% increases from that sector weren’t enough to afford for 20% losses on avenues that represented 70% of the market. By 2016, streams were already up to 29,5% of the global market and growing faster than ever posting a tremendous 60,4% increase. Since its share is much bigger now its growth impacts far more on the overall total, which resulted in a 5,9% increase in 2016.
But this trend is far from being over. The more it continues, the more streaming’s share of the pie will be large, and the more its increase will fuel the overall total. The below table lists all five fragments of the music industry revenues in billions of dollars as well as their percentage of change in 2016.
What happens when we apply the same percentage of evolution for each avenue in the upcoming years?
You can now understand why artists no longer whine anymore about streaming and why no insider is worried about Spotify running at a loss for now. While the creation of iTunes was like opening a Pandora’s box, streaming is the Ali Baba’s cave of the music industry.
Obviously, one may wonder if streaming will really continue booming like this. I always insist that every figure has a meaning. You can’t just expect a market to keep growing incredibly well over your previous performances for no reason. Downloads too were increasing like crazy at first and we know what happened there. Will it be a déjà vu moment or a real success story?