IFPI Report: Reading Between the Lines

IFPI Report: Reading Between the Lines

When the International Federation of the Phonographic Industry (IFPI) distributed its Global Music Report, reporters and industry organizations noted the role of streaming in the global increase in music consumption and industry revenue.

It’s fair to draw that conclusion. Total recorded music revenue grew 3.2% to $15.0 billion. Digital services now account for 45% of recorded music revenue. The global recorded music industry experienced steady growth in 2015, while the growth of digital music last year was nothing short of impressive.

However, we have received some inquiries from individuals who were confused by the recent report, so we thought it useful to dig deeper into the details to provide important perspective about performance and digital collections.

In its most recent 2016 Global Music Report, IFPI split SoundExchange collections and reported our revenue in two separate categories. This accounting quirk does make it more challenging to see our impact in the world music market as the largest collective management organization in the world. Here’s what it did – IFPI reported satellite radio in its “Performance” category and webcasting in its “Digital” category.

We understand the challenges of trying to present a uniform global report when there are different practices in each country. Moreover, year-over-year comparisons can be tricky when the criteria change with new reporting formats, and that’s what happened here. In the 2013 IFPI report our SoundExchange total collections were reported in the “Performance Rights” category, in 2014 our collections numbers were moved into the “Digital” category, and this year our 2015 collections were split between the two. This naturally has led to some confusion, so we thought we’d help clarify our overall numbers.

If all of our SoundExchange collections were included in the “Performance” category, we would make up 33.4% of global performance category.

If all of our collections were placed in the “Digital” category, we would be 12.5% of the global digital category.

With such a dynamic and ever-changing industry, we sympathize with any organization that attempts to track industry revenue. But when confusion in the public arises as a result of modifying approaches, it’s important that we provide the analysis that helps explain those modifications and clarify any errors.

In the end, all roads point to continued strong growth in the digital and streaming sectors, and we are happy for the role we play in helping the industry achieve that growth.