Global revenue from recorded music business tops $15B in 2015
After years of consistently declining revenue due to a myriad of unforeseen hurdles like piracy and plummeting physical album sales, 2015 marked the first time in nearly two decades that the global recorded music industry saw a meaningful increase in revenue. The International Federation of the Phonographic Industry’s 2015 digital music report was released on April 12, and reported that revenue rose more than 3 percent in 2015. 2015’s revenue, topping $15 billion, is the industry’s first notable jump since 1998, when global revenue increased 4.8 percent.
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The long-awaited uptick benefits a different interest group in 2016, however — most of the revenue recorded in 2015 came from paid subscription services, supplemented from revenue collected from ad-supported services like YouTube. The video platform is currently negotiating with the big three record labels, whose deals with YouTube have either already expired or will later this year.
The RIAA criticized YouTube in a March 2016 report, alleging that the service doesn’t pay an equitable share of royalties even given surging use worldwide. The same report found that labels collected more revenue from vinyl sales than from advertising revenue on YouTube. The RIAA’s 2015 digital music report revealed that 4 percent of global revenue from recorded music, around $600 million, is collected from ad-supported platforms. YouTube is by far the largest player in this category, with 900 million users worldwide. Paid-music subscribers totaled 68 million in 2015, up from 41 million in 2014.
YouTube’s chief business officer, Robert Kyncl, disagrees with industry critcism and claims “free is the future, ad supported is the future.” In a statement, YouTube backed the executive. “To date, Google has paid out over $3 billion to the music industry — and that number is growing significantly year on year,” YouTube said in a statement to The New York Post. “Only about 20 percent of people are historically willing to pay for music. YouTube is helping artists and labels monetize the remaining 80 percent that were not previously monetized.”
Others are not so optimistic. “The main concern is the fact that ad revenue is not climbing in line with views,” an industry source commented. “The value of a stream is dropping and we want to make sure there’s a floor in the per stream rate.”
Via: New York Post