The Tribune

ACTIVTRADES WEEKLY

By CHRIS ILLING

Business Developer

www.activtrades.bs

THE Music industry has been in a state of transformation since the Internet’s launch in 1999.

Around $24bn worth of CDs, LPs, videos and tapes were sold in 1999 compared to just $5bn in 2021. And the global market for music recordings and viewings was shrinking until 2014. Due to the improvement of Internet services and bandwidth, new media such as streaming and downloads have helped to grow the market again.

Spotify distributed more than $7bn to rights holders in the music industry in 2021. You Tube, which is owned by Google, now has more than $6bn and should soon trump Spotify.

A whopping $16.9bn, out of the $25.9bn in total revenue in the global recorded music market alone (not counting the publishing business), came from streaming in 2021. All services pay around two-thirds of their total revenue to the music industry.

In 2021, Spotify paid out more than $7bn to a wide variety of rights holders for the more than-70m songs represented on the platform. But when it comes to figures for Apple Music and Amazon Music, however, the two technology giants are deliberately quiet. Music services are primarily seen as part of the overall ecosystem. As a result, they are silent about individual distributions. The latest subscriber numbers for Apple Music are from June 2019 (more than 60m). At the beginning of 2020, Amazon declared it had around 55m users.

In September 2021, the Google subsidiary, YouTube, announced it had more than 50m paying You Tube Music and You Tube Premium subscribers who pay 11.99 euros per month for music and advertisement-free videos.

Last Tuesday afternoon, Google’s music director, Lyor Cohen, wrote in a blog post that the company distributed more than $6bn in the 12 months between July 2021 and end-June 2022 to the music industry. Two billion more than in the 12 months before. According to Spotify, it was worth more than $5bn in 2020.

You Tube aims to overtake the Swedish service by 2025 as the largest single source of revenue for the music industry. On its way to the stated goal, You Tube has an advantage over Spotify that makes a direct comparison difficult. In addition to the subscription model, there is also the video portal You Tube itself, which users can use free of charge with advertising breaks. The company calls the two streams of income “twin engine growth engines”. Around 30 percent of the $6bn came from user-generated content on YouTube. There are voices in the music industry who are calling for a higher share of the video platform’s huge advertising pie. In 2021, advertising revenue was $28.8bn, up from $19.8bn in 2020.

According to a Goldman Sachs study, global revenue is expected to climb to $142bn by 2030. The growth will be driven primarily by the streaming market, which is expected to reach around 1.2bn customers in another eight years.