Musician Shafik Walukagga, alias Fik Fameika, performs at his concert at Lugogo Cricket Oval in Kampala on January 27. Experts say fans are increasingly valuing music, with unprecedented access to new releases. PHOTO/M. KAKUMIRIZI
The latest global music report by the International Federation of the Phonographic Industry (IFPI) shows that sub-Saharan Africa once again had the fastest growth of any region. Its revenues climbed by 24.7 percent, fueled by gains in paid streaming revenues (+24.5 percent).
According to the IFPI’s Global Music Report 2024, South Africa remained the largest market in sub-Saharan Africa. The rainbow nation contributed 77 percent of regional revenues after growth of 19.9 percent.
The report attributes the growth in the region to a rich blend of genres and cultures driving creativity and growth.
“The growth across various African genres is the highlight for me. I always wanted there to be more to African music across the world than just Afrobeats,” says Christel Kayibi, director of repertoire strategy, Sony Music Africa.
“Obviously, Amapiano is becoming well-established on a global stage, but there are other artistes and genres ready to step into the spotlight. I think as labels, because the A and R (artists and repertoire) sector is so competitive, particularly around certain tracks, we need to ensure artist development and building sustainable careers – in Africa and overseas, remains an important part of our toolkit. That’s the name of the game for all record companies, in my view,” Kayibi adds.
Africa is rising
Tunji Balogun, the chairman and chief executive officer of Def Jam Recordings, says a deliberate strategy to engage and drive developments in the region by forging partnerships is yielding dividends.
“When it comes to music coming out of sub-Saharan Africa, we’ve partnered with a label from Nigeria called Native. They really spoke directly to this community of Gen Z African kids,” Balogun reveals, adding, “I met them probably four or five years ago, and I felt strongly that I wanted to work with people who have genuine connection to the culture on the continent. We decided to do a joint venture. We signed an artiste, Odumodublvck, a rapper from Nigeria and last year, he was the biggest new artiste, I would say, on the continent.”
Such is the nature of the partnership that the rapper was able to connect with a US audience via Def Jam. Balogun says Odumodublvck has “done really, really well.” When the rapper held his first show in the US before a packed room, “everybody knew all the words.”
Simon Robson of Warner Music says the lure of Africa is traceable in its variety of genres that “transcends national or global barriers.” Robson says “the export potential of African music is huge”, coming as it has “from a low base.”
Reflecting on the nature and future of emerging markets in general, Alfonso Perez-Soto, president of emerging markets, Warner Music, says: “I think they show the strength and quality of music from every corner of the world. When you have DSPs (Digital Service Providers) and social media meeting incredible artistes and strong cultures, great music will win. It will also have the chance to reach a level of audience that was previously denied—and those chances are being taken.”
Global industry growth
Global recorded music revenues per IFPI increased by 10.2 percent in 2023, driven largely by growth in paid streaming subscribers. Figures released on March 21, 2024, in the IFPI report show that total trade revenues reached $28.6b in 2023, the ninth consecutive year of growth.
Streaming revenues accounted for the majority of revenue growth and total share of the market. Subscription streaming revenues alone grew by 11.2 percent and made up almost half (48.9 percent) of the global market. In 2023, the number of paid subscriptions to music streaming services passed 500 million for the first time. There are now more than 667 million users of paid subscription accounts, with household penetration varying greatly by country.
There was strong growth in other formats too, with a double-digit percentage increase in physical revenues (up by 13.4 percent) and gains in income from performance rights (up by 9.5 percent). Driven by strong gains in CD revenue and the continued expansion of interest of vinyl, physical formats were worth $5.1 billion in 2023 and accounted for 17.8 percent of the total global market, up from 17.3 percent in 2022.
K-Pop propels Asia
Asia remained the leading region for physical, responsible for almost half (49.2 percent) of global revenues from the format. This was helped by strong sales from K-Pop acts. This is the third consecutive year in which both digital and physical revenues have increased simultaneously.
There was a positive story of growth across the globe as the work and investment from record companies contributed to every region experiencing revenue growth in 2023. Five of the world’s seven regions posted double-digit percentage gains.
“The figures in this year’s report reflect a truly global and diverse industry, with revenues growing in every market, every region and across virtually every recorded music format. For the third year in succession, both physical and digital formats grew with a strong rise in the users of paid streaming subscribers—as well as price increases—contributing significantly to total revenue growth,” John Nolan, IFPI’s chief financial officer and interim joint head, says.
He adds: “This growth results from record companies’ sustained investment in artistes and their careers—more than $7.1 billion annually on A and R and marketing alone—and the impact it has on music ecosystems all over the world.
Fans are increasingly valuing music, with unprecedented choice and access to new releases, with 2023’s IFPI Global Charts, including a diverse range of new genres and artistes. This is testament to the talent of these artistes, the passion of their fans, and the work of record labels both in championing artistes and providing the best possible foundations for their global success.”
The IFPI’s report shows how the partnership between artiste and label continues to have a positive impact on local economies.
Lauri Rechardt, IFPI’s chief legal officer and interim joint head, describes as “encouraging” the sustained growth of the recorded music market.
Rechardt adds that: “It’s also right for us to acknowledge the challenges the industry faces, including streaming fraud, digital piracy in all its forms and, of course, the threat from the abuse of generative artificial intelligence if it is not developed responsibly and with respect for artists’ and labels’ rights.”
Rechardt further notes that “music fans greatly value authenticity and our industry has a strong track record of licensing music and supporting the development of new services that create these experiences for fans.” The industry, IFPI’s chief legal officer and interim joint head adds, “still need[s] effective tools and the support of authorities to tackle unauthorised uses and to ensure the music ecosystem remains one that is sustainable for the long-term.”
The global picture
Representing the greatest share of global recorded music revenues (40.9 percent), there was a gain of 7.4 percent in 2023 in the USA and Canada. Revenues grew at a faster rate than in 2022 (5.1 percent). Revenues from the USA, the world’s single largest recorded music market, rose by 7.2 percent. In Canada, another top 10 market, revenues jumped by 12.2 percent.
Representing more than a quarter of global revenues (28.1 percent) after revenue growth of 8.9 percent, Europe remained the second-largest region in the world for recorded music revenues in 2023. The region’s three biggest markets all recorded healthy growth: the UK (8.1 percent), Germany (7.0 percent), and France (4.4 percent).
The third largest region globally, revenues in Asia rose by 14.9 percent in 2023. The two largest Asian markets saw healthy growth: revenues from Japan, the world’s second-biggest market, were up by 7.6 percent and there was steep growth in China (the fifth largest market) of 25.9 percent, the fastest rate of increase in any top 10 market.
In the 14th consecutive year of revenue growth, recorded music revenues in Latin America rose steeply in 2023 by 19.4 percent, once again outpacing the global growth rate. There were double-digit percentage climbs in revenues in Brazil (13.4 percent) and Mexico (18.2 percent), the region’s largest markets. Streaming was the key driver and made up 86.3 percent of the region’s revenues.
Australasia posted double-digit percentage growth of 10.8 percent in 2023, an increase on the 8.3 percent rise in 2022 and boosted by an increase in subscription streaming revenues (13.5 percent). Revenue growth accelerated in Australia, a global top 10 market, up by 11.3 percent. In New Zealand, revenues increased by 8.4 percent.
Streaming revenues dominated once more in the Middle East and North Africa (Mena) with a 98.4 percent share of the market in that region.
Total Mena revenues rose by 14.4 percent in 2023, exceeding the global growth rate.
“The role of record companies in empowering artistes and supporting the growth of the wider music industry has never been more important than it is in today’s highly competitive, global landscape,” the report notes.
According to the report, when artistes choose to partner with a record company they benefit from the support of agile, highly responsive global teams of experts dedicated to helping them achieve creative and commercial success and building their long-term careers.
Record labels are the driving force behind artistes as they realise their vision, providing a broad network of experienced professionals that help them to cut through and connect with fans in the most compelling ways.
Alongside the integral creative and commercial support they provide to their artiste partners, record labels continue to play a crucial role as the leading investors in music, the report adds.
