Global revenue for recorded music had a significant bump in 2020, growing by 7% despite the pandemic, according to a new study released by Midia Research.
That came despite a second quarter where revenue was down by 3% from the year before, as music took a hit as quarantining kicked in. By the fourth quarter of 2020, though, revenue growth from year-to-year was up a remarkable 15%, more than making up for those earlier losses. Midia is forecasting a rosy picture for 2021, if that trend continues.
The growth was due in large part to the strength of indie artists and labels, which grew at 27% for the year, far outperforming the growth rates the major labels were able to achieve.
The overall 7% growth for the industry saw revenues of $23.1 billion coming in for the year, a $1.5 billion leap over 2019.
In particular, artists releasing their music themselves have powered growth in the last couple of years. Those releases experienced a 34.1% growth rate in 2020, which allowed the DIY sector to finally top the billion-dollar mark, hitting $1.2 billion by the end of the year
Overall, revenue from streaming for all labels and artists was at $14.2 billion, a 19.6% increase from 2019.
Reports were not as bullish across the board for all the big music companies. Major labels saw their market share by one percentage point, from 66.5% to 65.5%. Of the majors, Sony Music Entertainment saw the greatest growth, with Universal Music Group — the market share leader — also seeing gains, trailed by Warner Music Group, which reported flat revenues for 2020.
Midia also cautioned that, as good as results looked for 2020 after that second-quarter scare, growth for 2020 still underperformed the gains seen in 2019.
The $1.5 billion jump in revenue for 2020 was not as robust as the $2.1 billion leap from 2018 to 2019, which was an 11% increase.
“The recordings business managed to deliver a strong performance due solely to the growth of streaming,” said Mark Mulligan, MIDiA’s managing director. “Streaming has been the engine room since the recorded music business returned to growth, but the fall in performance and sync revenues due to the pandemic highlighted just how overly dependent the global music business has become on streaming.”
Added Mulligan, “With lots of private equity money now pouring into creator tools companies like Native Instruments, expect this space to hot up even further in 2021. The recorded music business is changing, and it is changing fast.”
