Streaming Spotlight Monday 24th March

Global Music Revenue Growth

The International Federation of the Phonographic Industry (IFPI) reported a 4.8% increase in global recorded music revenues for 2024, totaling $29.6 billion. This growth was primarily driven by a 10.6% rise in streaming subscriptions, reaching 752 million users. Paid subscriptions grew by 9.5%, while ad-supported formats saw a modest 1.2% increase. Performance rights revenues also experienced a 5.9% uptick. Despite a 3.1% decline in physical format revenues due to falling CD sales, vinyl records marked their 18th consecutive year of growth, up 4.6%. Regionally, the Middle East and North Africa led with a 22.8% increase, followed closely by Sub-Saharan Africa (22.6%) and Latin America (22.5%). Europe and North America reported growth rates of 8.3% and 2.1%, respectively. IFPI's Chief Executive, Victoria Oakley, emphasized the need for policy protections against unauthorized use of copyrighted music by AI developers, advocating for AI to enhance rather than replace human creativity. ​Reuters

U.S. Market Achievements

In the United States, recorded music revenue reached an unprecedented $17.7 billion in 2024. Streaming services dominated, accounting for 84% of this revenue ($14.9 billion). Notably, the industry surpassed 100 million paid subscribers for the first time. Physical sales, particularly vinyl records, contributed $2 billion, underscoring the enduring appeal of tangible music formats. ​Axios

Universal Music Group's Financial Performance

Universal Music Group (UMG) reported that its recorded music subscription streaming revenues exceeded $5 billion in 2024, marking a 9.1% year-over-year increase. However, ad-funded streaming revenues saw a slight decline of 4.1% in Q4, amounting to €375 million ($408 million). For the full year, ad-funded revenues remained flat at €1.414 billion ($1.53 billion). UMG's overall revenues for 2024 reached €11.834 billion ($12.81 billion), a 7.6% increase from the previous year. ​Music Business Worldwide

Emerging Subscription Models

Boyd Muir, UMG's Chief Operating Officer and Chief Financial Officer, announced the anticipated introduction of "super-premium" music subscription tiers in 2025. These tiers aim to cater to superfans willing to pay higher fees for enhanced experiences, including early music releases, exclusive events, artist interactions, and collectibles. Muir projects that within two to three years, 20% to 30% of existing subscribers may opt for these premium offerings. While Spotify's "Music Pro" tier is expected to be priced at $16.99 per month, Muir suggests that other services might set prices between $22 and $24 per month. ​Music Business Worldwide

Streaming Content Saturation

A recent report highlighted that audio streaming services now host over 200 million tracks. Alarmingly, nearly half of these tracks attracted no more than 10 plays each in 2024. Furthermore, data from Chartmetric revealed that out of 11 million Spotify artists tracked, only 5.31% had more than 1,000 monthly listeners, indicating that approximately 95% of artists have fewer than 1,000 monthly listeners. This underscores the challenges artists face in gaining visibility and the oversaturation of content on streaming platforms. ​Music Business Worldwide

Industry Leadership Insights

Sir Lucian Grainge, Chairman and CEO of UMG, addressed staff in a memo, declaring the arrival of the "Streaming 2.0" era. He emphasized a new age of innovation, consumer segmentation, geographic expansion, and increased consumer value and average revenue per user (ARPU). Grainge highlighted UMG's commitment to advancing an artist-centric strategy and promoting responsible and effective approaches to artificial intelligence in the music industry. ​Music Business Worldwide+1Music Business Worldwide+1Music Business Worldwide

Debate on Artist Imagery

Veteran music producers Mike Stock, Matt Aitken, and Pete Waterman criticized modern pop music for its perceived over-sexualization. They singled out young artist Sabrina Carpenter for her revealing outfits and suggestive lyrics, arguing that such trends undermine women's rights. This critique comes despite their own history of producing music for artists with provocative images in the 1980s, highlighting ongoing debates about artist representation and industry standards.