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Are you interested not only in listening to music, but also in the business behind it? A look at the music industry in numbers quickly shows how trade and sales have changed over the years and what the focus is nowadays. But how exactly is the music industry developing and what do paying music fans contribute to it? Find out more in this article.
A very simple and obvious value to consider for the music industry in numbers is the turnover. The higher the sales, the better the associated successes for musicians can be considered. However, in addition to looking at pure sales, it is also necessary to focus on the way in which music is used. This makes it clear how the type of downloading has changed over the years and what comparisons can also be made internationally. For an accurate analysis of the music industry in figures, it is therefore important to take a comprehensive look back. To complement this, we also look at music usage for this topic, distinguishing between numerous age groups and structures. For example, in many fields, music is a question of generation, which refers not only to the genre but also to the type of retrieval.
The average listener listens to around 19 hours of music a week—whether actively or passively. This leaves a lot of room for different genres and styles, with the radio still being the biggest source of music for most people. Especially among the older group (aged 65 and over), the radio is still the most common source. However, the lower the age, the greater the share of audio streaming. In the 16-24 age group, about 50 percent of their audio intake is through streaming. Conversely, only 20 percent of the music accessed is listened to on the radio.
Similar data is also shown for video streaming, with the younger demographics also producing higher values. The situation is the other way around for music on CDs, with the older target group clearly outperforming at more than 10 percent. In the 16–24 age group, the share is just 2 percent. Thus, at least the age structure shows that the trend is moving in the direction of streaming.
So while the CD as a medium in music is increasingly irrelevant, the prominence of digital versions is rising every year. The share of digital downloads was just 15 percent in 2011, but sits at around 70 percent today. It's the other way around with physical recordings. Whereas ten years ago these still clearly set the tone with around 80 percent, today less than 25 percent of songs are still sold as traditional CDs. At the same time, overall sales continue to rise slightly.
Digital revenue—which comes primarily from streaming income—has changed significantly on this basis. Classic music downloads (for individual purchase) are significantly lower than streaming solutions, which is due to the simplicity of Spotify and co. Classic CDs and especially vinyl albums continue to have a chance in the physical area and are experiencing a kind of comeback.
The older demographic in particular shows that CDs still enjoy a high status today. They usually find it much more pleasant to put the CDs of their favorite musicians on the shelf and complete their collection in this way. In addition to traditional CDs, it is primarily vinyl albums that are very popular today due to their special presentation and structure. Here, too, the collector phenomenon is intensifying. Even if physical media's share of sales has declined very significantly over time, offering a CD or vinyl version is still worthwhile for musicians.
Streaming has been a key factor shaping the music industry in recent years. Platforms like Spotify enjoy an unrivaled reputation among listeners. While just 34 billion songs were streamed in 2016, this figure has already quadrupled in 2020. There are now far more than 170 billion streams that are financed by advertising. So despite very low margins, musicians can hardly avoid offering their music there.
As the largest part of digital music downloads, streaming is the decisive factor when it comes to modern and convincing music use in the long term. Above all, flexibility is a decisive argument for the associated target group. This is also reflected in the figures for the music industry, where music streaming now accounts for the largest share—both in terms of sales and download numbers.
While Germany has the fourth strongest music market in a global comparison, the USA, Japan, and the UK are even larger. In terms of continents, there is also positive growth with no exceptions, with Europe being the lowest at around 3 percent. By comparison, the trends are much more pronounced in Latin America, where streaming in particular contributes to 15 percent revenue growth. While revenues from music sales in Germany are rising only slowly, the trend is increasing somewhat more clearly worldwide, with streaming also continuing to grow in this market year over year.
In addition to the sheer strength of the music market, growth is also important for the music industry when we're talking facts and figures. It is noticeable that the fastest growing market is in South Korea, with streaming sales at the top of the list (as in all countries). On the other hand, there are no major differences in terms of music forms for the evaluation of the music industry. The trend of somewhat weaker CD sales and the high relevance of digital songs continues throughout the world.
In parallel with the relevance of digital streams and downloads, the music industry's distribution channels also show how important online sales have become. More than 92 percent of recorded music is now sold online, with digital retailers seeing a significant increase in sales. In contrast, a look at the statistical development of the local electronics store shows significant losses, which can be attributed primarily to the declining demand for CDs. Similar trends (though not quite as strong) can be seen in drugstores, grocery stores, bookstores, and media retailers. Only digital retailers are reporting positive growth.
It seems that the music industry will continue to develop positively for the foreseeable future. The sales trend has been positive for many years, even if the composition of sales has changed over time. However, physical recordings will certainly not disappear from the market completely anytime soon. The demand for special editions will remain too high for that.
In addition to the development in Germany, the global focus also plays an important role. Therefore, in the long run, the music industry will not only focus on the European market, but above all on the worldwide trends, which cause an increasing total turnover. As a result, the music industry will continue to grow on all continents and expand the existing potential. One thing is certain: digital sales will play a leading role.
The music industry has been undergoing significant change for years, which is also reflected in the form of media and its retrieval. Although sales are increasing in the long term, the way in which they are used is changing, especially among various demographics. If you want to learn more about the music industry and music business, take a look at our article on music plagiarism or find out how to plan your year as a professional musician. If you're also interested in making new contacts with musicians, feel free to use our personals here at mukken. This way you can expand your network with just a few clicks.
Originally published on February 10, 2023, updated on February 10, 2023
Main topic: Everybody can sing - this is how you learn it right!