The global market for recorded music has grown significantly in 2021.

As the umbrella organization of the label side, the "International Federation of the Phonographic Industry" (IFPI), announced on Tuesday in London, there was an increase of 18.5 percent for the past year and thus total sales of 25.9 billion dollars Beech.

Benjamin Fisher

Editor in Business.

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It's the seventh consecutive gain after the market grew 7.4 percent in 2020.

Streaming continues to be the biggest revenue driver.

An increase of 24.3 percent means sales of now 16.9 billion dollars - advertising-supported and subscription models combined - and thus 65 percent of global sales with recorded music.

Services such as Spotify, Apple, Amazon, Youtube Music and other providers distribute around two thirds of their total income to the rights holders in the music industry.

The majority (around 50 percent of the total revenue) goes to the recording side.

Publishers (and through them, songwriters) receive a significantly smaller share.

The publisher's income from the evaluation of texts and compositions is not included in the IFPI balance sheet.

70 to 80 percent of the streams fall on the catalog

Overall, as of the end of last year, the association recorded 523 million paying streaming users, after 443 million in 2020 - including all users of family subscriptions, for example.

According to the report, the share of revenue from paid streaming services was $12.3 billion.

Sales of sound recordings also increased for the first time in 20 years (up 16.1 percent to five billion dollars), after the effects of the pandemic had sometimes significantly affected trade in the first half of 2020 and sales at concerts plummeted.

According to IFPI, 49.6 percent of all physical sales were achieved in Asia.

The CD in particular is still very much in demand in Japan, for example.

In addition, vinyl is still booming.

Downloads and other digital offers still accounted for 4.3 percent of sales (minus 10.7 percent).

Revenue from performing rights rose 4 percent to $2.4 billion, while revenue from the use of recordings in films, advertising or video games rose 22 percent to around $500 million.

The constant growth is reflected in the balance sheets of the music companies - above all the so-called majors Universal, Sony and Warner Music with their large label structures.

The three market leaders, but also other labels with a popular repertoire, benefit from their huge catalogue.

Around 70 to 80 percent of the streams fall on older works.

With each new stream, an amount is due, albeit a small one, unlike in the time before streaming, when new business dominated, since money was ultimately only made from the one-time sale of sound carriers.

Debate on the distribution of funds

This development is also a reason for the strong interest of financial investors in music catalogs or individual packages of music rights and the associated future claims for royalties.

In times of low interest rates, proven works are considered a safe and lucrative investment by buyers against the background of stable growth - especially since the licensing of music on other digital platforms apart from streaming services such as Tiktok, Facebook, Peloton and Co also fuels the hope for further growth.

With this

Development is of course also accompanied by a debate about the distribution of funds between artists and their partners in the industry - not least with a view to contracts from the heyday of the CD, where, for example, distribution costs were applied that no longer arise in a largely digital market.

Looking at the regions, growth was particularly strong in Latin America (up 31.2 percent) and the Middle East/North Africa (up 35 percent).

Both regions still account for a comparatively small part of total sales.

Latin America, for example, contributed 3.9 percent.

With growth of 22.6 percent, the world's largest music market, the USA, also grew significantly.

For Germany – the fourth largest market for music recordings after Japan and Great Britain – the IFPI reported an increase of 12.6 percent.

The Federal Association of the Music Industry (BVMI) had announced an increase of 10 percent at the beginning of March.

The background are different calculation methods.

For example, the BVMI works with retail sales, while the umbrella organization uses income from the music industry.