IFPI Report: Digital Continues to Fuel Music Industry’s Growth

IFPI Report: Digital Continues to Fuel Music Industry’s Growth

Digital music continued its historic growth in 2016, according to a new report from the International Federation of the Phonographic Industry (IFPI).

The IFPI report shows industry revenue grew 5.9 percent last year, from $14.8 billion in 2015 to $15.7 billion. That represents the biggest year-over-year increase in revenue since the IFPI began collecting industry data in 1997, the organization said.

Global revenue from digital music increased 17.7 percent to $7.79 billion. In other words, revenue from digital music represented nearly 50 percent of the industry’s entire revenue in 2016.

While revenue from digital services represented the largest share of the industry’s global revenue in 2016, revenue from streaming represented the majority of digital income. It’s further evidence that the streaming revolution – with consumers preferring access over ownership – is stronger than ever.

And there’s more to come, according to the IFPI.

Streaming is now established as the most prevalent and significant format in the modern music industry, fueling growth in almost all major markets and starting to unlock the phenomenal potential within developing territories, the report says.

Digging deeper into the report, the data also shows clearly that performance rights royalties continued to rise, increasing 7 percent to $2.2 billion in 2016. For SoundExchange registrants and members, royalties from digital radio represent the most significant share of performance rights revenue.

Trends identified in the IFPI report bode well for all SoundExchange payees because we make sure the 130,000 artists and rights owners we serve get their royalties quickly and efficiently when their recordings are played on more than 3,000 digital radio services. (And don’t forget — we’ve also made registration easier than ever because you can do it online. Or you can contact us at 1-800-961-2091 or accounts@soundexchange.com and tell us you want to become a member.)

The IFPI’s data also illustrates that SoundExchange members made a global impact in 2016 – 23 of 39 performers listed on the IFPI’s top artist, album and singles charts are SoundExchange registrants and members.

The report also found that in 2016:

  • Revenue from streaming increased 60.4 percent
  • Revenue from the sale of physical copies declined 7.6 percent, but the sale of vinyl increased 23.5 percent
  • Revenue from digital downloads fell 20.5 percent