2019 was another good year for the music industry. According to IFPI’s latest Global Music Report, worldwide recorded music revenues totaled $20.2 billion last year, up 8.2 percent from the previous year’s total of $18.7 billion. This marks the fifth consecutive year of growth for the global music industry after nearly two decades of gradual decline.
Interestingly, the transition to digital distribution has both fueled the music industry’s decline and helped stop it. After the golden age of the CD, which propelled worldwide music revenues to unprecedented highs through the 1990s, the advent of MP3 and filesharing hit the music industry like an earthquake. Between 2001 and 2010, physical music sales declined by more than 60 percent, wiping out $14 billion in annual revenue. During the same period digital music sales grew from zero to $4 billion, which wasn’t even remotely enough to offset the drop in CD sales. It wasn’t until the appearance and widespread adoption of music streaming services that the music industry’s fortunes began turning around again.
According to data published by IFPI, the music industry bottomed out in 2014, when revenue was at a 20-year low of $14.0 billion, nearly $10 billion less than it had been 15 years prior, when physical music sales alone had amounted to more than $20 billion during the peak of the CD era. After some initial hesitance by the music industry to embrace streaming services, record labels and artists appear to have followed consumers’ lead in accepting that the future of music lies in digital distribution. Last year, digital music accounted for the lion’s share of worldwide music revenues, with streaming services alone accounting for 56 percent of the industry’s total haul. According to IFPI, 341 million people had a paid music streaming subscription by the end of 2019 and streaming revenues are now considerably bigger than digital download sales ever were.
When Apple launched Apple Music five years ago, on June 30, 2015, many people thought it would be a question of ‘when’ rather than ‘if’ Apple would catch up with and eventually surpass Spotify. Apple’s financial and marketing power combined with an installed base of hundreds of millions of iOS devices seemed like a tough combination to beat for the Swedish music streaming pioneers.
And yet, ever since Apple launched its own streaming service halfway through 2015, Spotify has managed to keep Apple Music at arm’s length. If anything, Spotify appears to be pulling away from Apple Music in terms of paid subscribers. As the following chart illustrates, the gap between the two streaming services has gradually widened from 20 million when Apple Music was launched to roughly 60 million by March 2020.
While Apple hasn’t publicly commented on its subscriber count since reaching 60 million in June 2019, estimates from MIDiA Research put Apple Music subscribers at 72 million for Q1 2020. Meanwhile Spotify, which reports its subscriber number on a quarterly basis, reached 130 million paid subscribers by the end of March.
Our family has had a Spotify subscription since 2018
I’m loving it
My playlists are deeper than they’ve ever been, I’m discovering new music on a regular basis and my girls are increasingly more knowledgeable about music.
No idea what Apple Music is like – didn’t like what i knew about their approach in the past so didn’t even look at them.
Love the convenience of it, but the artists get screwed. My approach is to stream to find stuff I like then buy physical copies of what I enjoy (vinyl preferred, CD or digital download if no vinyl) and please please please support your favorite artists by buying merchandise or paying for livestreams while concerts are shut down!!!
Yep. The money for the artists are in the tours. For all the cash collected in CD sales, it was largely going to the record producers and retail entities to begin with. When you look at the digital rights stuff and how much money is paid to whom, you realize just how lucrative it was to stamp/burn and sell discs/records.