Music is one of the few forms entertainment that has remained a significant part of peoples’ daily lives for thousands of years. More than just entertainment, music is an art form, an important medium for cultural exchange, and in more recent times, a major business industry. The demand for music consumption has created a multi-billion-dollar industry encompassing production, distribution, publishing, live concerts, album sales, streaming, and other music related activities. In the United States, streaming accounts for a massive portion of overall music industry revenue, with both physical and digital music sales decreasing in response to the success of platforms like Spotify. In less than 10 years, music streaming revenues have grown from figures in the hundreds of millions of U.S. dollars, to figures in the multiple billions.
Publishing companies dominate the market
The biggest players in the music industry aren’t the artists themselves, but the distributors, many of which have grown into massive billion-dollar companies. Warner Chappell, Universal Music, and Sony/ATV account for well over 50 percent of music publishing revenues around the world. The revenue generated by the music giants is mostly accumulated through recorded music but these companies also amass billions of dollars in revenue each year from music publishing alone, and have massive influence over the industry as a whole. Many of the world’s biggest record labels are owned by these publishing companies, meaning that their influence extends all the way to the artists themselves. For this reason, there has been an increased interest in independent music publishers. While Indies’ individual market share cannot exceed five percent, their overall market impact with their niche-offerings should not be underestimated.
Music streaming is on the rise
Ultimately, the music industry in the U.S. remains strong and despite significant changes since its heyday, there is still potential for growth. Recorded music revenue has hovered between 4.6 and 4.9 billion U.S. dollars since 2009, however in 2022 revenues surged to over 10 billion, a significant increase on previous years. The increasing availability of streaming services, along with the massive popularity of smartphones has ensured that more people than ever have access to music essentially whenever they want. Whilst just 33.4 million physical albums were sold in the U.S. in 2022, the increased demand for digital music has not meant that more music albums were downloaded, since people tend to stream music rather than buy or download entire albums. This means that the streaming revenue has grown exponentially, amounting to 13.3 billion U.S. dollars in 2022, which marks a dramatic upward spike from the four billion dollars recorded in 2016. Looking at the consistent increase in streaming revenue since 2010, these figures are unlikely to show any signs of decline. Looking to the future, brands and consumers can expect the music industry in the United States to become increasingly more reliant on revenue from digital channels.
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