The latest world music report from the International Federation of the Phonographic Industry (IFPI) shows that sub-Saharan Africa once again had the fastest growth of any region. Its revenue rose 24.7 percent, fueled by gains in paid streaming revenue (+24.5 percent).
According to IFPI’s World Music Report 2024, South Africa remained the largest market in sub-Saharan Africa. The rainbow nation contributed 77% of regional revenue after growing 19.9%.
The report attributes growth in the region to a rich mix of genres and cultures that lead to creativity and growth.
“Development in various African species is the highlight for me. I always wanted there to be more to African music around the world than Afrobeats,” says Christel Kayibi, director of repertoire strategy, Sony Music Africa.
“Obviously, Amapiano is establishing itself on the world stage, but there are other artists and genres ready to step into the limelight. I think as labels, because the A and R sector (artists and repertoire) is so competitive, especially on some tracks, we need to ensure that we develop artists and build sustainable careers – in Africa and abroad, it remains an important part of our toolkit. That’s the name of the game for all record companies, in my opinion,” adds Kayibi.
Africa is rising
Tunji Balogun, president and CEO of Def Jam Recordings, says a deliberate strategy to engage and promote developments in the region by creating partnerships is paying dividends.
“In terms of music coming out of sub-Saharan Africa, we have partnered with a record label from Nigeria called Native. They really spoke directly to this community of Gen Z kids in Africa,” reveals Balogun, adding, “I met them probably four or five years ago and felt strongly that I wanted to work with people who have a genuine connection to the culture on the Continent. We decided to make a joint venture. We signed an artist, Odumodublvck, a rapper from Nigeria and last year, he was the biggest new artist, I would say, on the continent.”
Such is the nature of the collaboration that the rapper was able to connect with the US audience through Def Jam. Balogun says Odumodublvck “did very, very well.” When the rapper made his US debut in front of a packed house, “everybody knew all the words.”
Warner Music’s Simon Robson says Africa’s allure is traceable to its diversity of genres that “transcends national or global barriers.” Robson says that “the export potential of African music is huge”, as it comes from a “low base”.
Reflecting on the nature and future of emerging markets in general, Alfonso Perez-Soto, president of emerging markets, Warner Music, says: “I think they show the strength and quality of music from every corner of the world. When you have DSP (Digital Service Providers) and social media meet incredible artists and powerful cultures, great music will win. It will also have the opportunity to reach a level of audience that has previously been denied – and those opportunities are being taken.”
Global industry development
Global recorded music revenue per IFPI grew 10.2 percent in 2023, driven by growth in paid streaming subscribers. Figures published on March 21, 2024, in the IFPI report show that total trade revenue reached $28.6 billion in 2023, the ninth consecutive year of growth.
Streaming revenue accounted for the majority of revenue growth and overall market share. Subscription streaming revenue alone grew by 11.2 percent and makes up nearly half (48.9 percent) of the global market. In 2023, the number of paid subscriptions to music streaming services exceeded 500 million for the first time. There are now more than 667 million users of paid subscription accounts, with household penetration varying significantly by country.
There was strong growth in other forms as well, with double-digit percentage growth in physical revenue (up 13.4 percent) and gains in performance rights revenue (up 9.5 percent). Driven by strong gains in CD revenue and continued expansion of interest in vinyl, physical formats were valued at $5.1 billion in 2023 and accounted for 17.8 percent of the total global market, up from 17.3 percent in 2022.
K-Pop promotes Asia
Asia remained the top region for physical, responsible for nearly half (49.2 percent) of global revenue from the format. This was helped by strong sales from K-Pop. This is the third year in a row that both digital and physical revenues have grown at the same time.
There was a positive growth story across the globe, as record label work and investment contributed to every region experiencing revenue growth in 2023. Five of the world’s seven regions saw double-digit percentage gains.
“The figures in this year’s report reflect a truly global and diverse industry, with revenues growing in every market, every region and almost every recorded music format. For the third year in a row, both physical and digital formats grew with strong growth in paid streaming subscribers—as well as price increases—significantly contributing to overall revenue growth,” said John Nolan, chief financial officer and interim joint chief of IFPI. , says.
He adds: “This growth results from record companies’ continued investment in artists and their careers—more than $7.1 billion annually for A and R and marketing alone—and the impact it has on music ecosystems in Worldwide.
Fans appreciate music more and more, with unprecedented choice and access to new releases, with the 2023 IFPI Global Charts featuring a wide range of new genres and artists. This is a testament to the talent of these artists, the passion of their fans and the work of record labels in both championing artists and providing the best possible foundations for their global success.”
The IFPI report shows how collaboration between artist and label continues to have a positive impact on local economies.
Lauri Rechardt, chief legal officer and interim joint head of the IFPI, describes the continued growth of the recorded music market as “encouraging”.
Rechardt adds that: “It is also right for us to recognize the challenges facing the industry, including streaming fraud, digital piracy in all its forms and, of course, the threat of genetic AI being misused if not developed responsibly and with respect to the rights of artists and record labels.
Rechardt further notes that “music fans greatly value authenticity, and our industry has a strong track record of licensing music and supporting the development of new services that create these experiences for fans.” The industry, adds IFPI’s chief legal officer and interim joint head, “still needs[s] effective tools and the support of authorities to tackle unauthorized uses and to ensure that the music ecosystem remains sustainable in the long term.”
The global image
Accounting for the largest share of global recorded music revenue (40.9%), growth of 7.4% in 2023 was recorded in the US and Canada. Revenue grew at a faster rate than in 2022 (5.1%). Revenue from the US, the world’s largest recorded music market, rose 7.2%. In Canada, another top 10 market, revenue rose 12.2%.
Accounting for more than a quarter of global revenue (28.1%) following revenue growth of 8.9%, Europe remained the world’s second largest region for recorded music revenue in 2023. The region’s three largest markets all recorded healthy growth: the United Kingdom (8.1 percent), Germany (7.0 percent) and France (4.4 percent).
The third largest region globally, revenue in Asia grew by 14.9 percent in 2023. The two largest Asian markets showed healthy growth: revenue from Japan, the world’s second largest market, increased by 7.6 percent and there was sharp growth in China (the fifth largest market) of 25.9 percent, the fastest growth rate of any market in the top 10.
In its 14th consecutive year of revenue growth, recorded music revenue in Latin America soared 19.4% in 2023, once again outpacing the global growth rate. There were double-digit percentage increases in revenue in Brazil (13.4 percent) and Mexico (18.2 percent), the region’s largest markets. Streaming was the key driver and made up 86.3% of the region’s revenue.
Australasia posted double-digit percentage growth of 10.8 percent in 2023, up from 8.3 percent growth in 2022 and boosted by growth in subscription streaming revenue (13.5 percent). Revenue growth accelerated in Australia, a global top 10 market, up 11.3%. In New Zealand, revenue rose 8.4%.
Streaming revenue once again dominated the Middle East and North Africa (ME) with a 98.4 percent market share in this region.
Mena’s total revenue grew by 14.4% in 2023, outpacing the global growth rate.
“The role of record companies in empowering artists and supporting the growth of the wider music industry has never been more important than it is in today’s highly competitive, global landscape,” the report notes.
According to the report, when artists choose to work with a record label they benefit from the support of flexible, highly responsive global teams of experts dedicated to helping them achieve creative and commercial success and build their long-term careers.
Record labels are the driving force behind artists as they realize their vision, providing a broad network of experienced professionals to help them transcend and connect with fans in the most compelling way.
In addition to the comprehensive creative and commercial support they provide to their artist partners, record labels continue to play a critical role as leading investors in music, the report adds.