The global recorded music market has continued to grow in 2024, reaching a total market value of $36.2 billion, marking a 6.5% increase from the previous year. While this growth rate is slightly lower than the 9.4% seen in 2023, it is still a strong indication of the industry’s resilience in the face of global economic uncertainty, inflation, and shifting consumer behaviors. When excluding expanded rights, the revenue stood at $32.1 billion.
The music industry has seen its fair share of fluctuations over the past few years, influenced by factors such as the COVID-19 pandemic, rising interest rates, and economic instability. However, 2024 has proven that the industry remains strong despite these challenges. That being said, future growth may require new strategies, as the traditional revenue models are showing signs of slowing down.
The Slowing Growth of Streaming
For many years, streaming has been the backbone of the recorded music industry, driving the majority of revenue. However, in 2024, its dominance has slightly declined. Streaming revenue grew to $22.2 billion, but its share of total market revenue dropped marginally from 61.5% to 61.3%. This marks the first time that streaming’s share has slightly decreased, signaling that the industry may be entering a new phase.
Despite price increases from major streaming services, overall revenue growth from streaming has slowed. Some Western markets have even seen growth rates below inflation, suggesting that subscription saturation may be approaching. While streaming remains a key revenue driver, it is no longer the sole force pushing the industry forward.
Other Revenue Streams on the Rise
With streaming growth slowing, other revenue streams have become increasingly important. Performance rights, sync licensing, and expanded rights have all seen significant increases, contributing to the industry’s overall growth.
Expanded rights, which include merchandise sales, brand partnerships, and other non-traditional revenue sources, grew to $4.1 billion in 2024. This highlights how labels and artists are successfully monetizing their fan bases beyond just music sales. The ‘Other’ category, which includes performance and sync revenues, saw an impressive 17.3% growth. Sony Music, in particular, led the way with a massive 38.6% growth in this segment, demonstrating the potential of diversified revenue streams.
Major Labels and Market Changes
Universal Music Group (UMG) maintained its status as the biggest record label in the world, generating $10.5 billion in revenue in 2024. However, Sony Music Group (SMG) had the fastest growth rate among major labels for the second consecutive year. SMG’s revenue increased by 10.2%, pushing its market share up to 21.7%. Between 2020 and 2024, Sony Music Group experienced an impressive total growth of 73.9%, solidifying its position as a dominant force in the industry.
Meanwhile, independent labels also made notable gains, increasing their market share to 29.7%. These indie labels continue to carve out a strong presence in the industry, offering artists more flexibility and alternative paths to success.
On the other hand, self-releasing artists (Artists Direct) faced challenges due to changes in royalty structures. While the number of self-releasing musicians increased by 17.2%, their collective revenue only grew to $2 billion. This suggests that independent artists are growing in numbers but struggling to generate substantial income through streaming alone, particularly due to adjustments in payout structures by major streaming platforms.
The Growing Divide Between DSPs and Labels
One of the most significant trends in 2024 has been the widening gap between digital streaming platforms (DSPs) and record labels. Streaming services such as Spotify, Apple Music, and Amazon Music have been growing their revenues at a much faster pace than the labels themselves. In fact, DSPs grew their revenue at three times the rate of record labels in 2024.
Streaming platforms have been implementing various strategies to increase their margins. These include diversifying their content offerings (such as podcasts and audiobooks), acquiring cheaper music through production libraries and exclusive commissions, negotiating licensing discounts, and even charging labels for promotional access to audiences through features like Spotify’s Discovery Mode. These tactics allow streaming platforms to boost their revenues while keeping their costs relatively low.
For record labels, this growing gap poses a challenge. As streaming services continue to gain leverage, labels will need to rethink their business models to remain competitive. If the trend continues, DSPs could become even more powerful gatekeepers of the industry, further shifting the balance of power away from traditional labels.
The Future of the Music Industry
While 2024 has been a solid year for the recorded music industry, there are several warning signs that suggest changes are on the horizon. The slowing growth of streaming, the rise of alternative revenue streams, and the increasing dominance of DSPs all point to a shifting landscape.
One of the biggest questions moving forward is how artists—particularly independent artists and smaller labels—will adapt to these changes. With streaming becoming a less reliable source of income, many musicians may look for alternative ways to build their careers, whether through live performances, fan-driven monetization, or direct-to-consumer sales.
The growing divide between major labels and independent artists is also worth watching. While larger labels may benefit in the short term from the challenges faced by self-releasing musicians, the long-term picture is less clear. If independent artists continue to struggle with streaming revenue, they may seek out new platforms and business models that bypass traditional labels altogether. This could lead to further market fragmentation and the rise of alternative distribution channels.
Additionally, emerging markets such as the Global South are becoming increasingly important. Countries like India, China, and Brazil are seeing rapid growth in streaming adoption and music consumption. As these markets expand, they will play a crucial role in shaping the future of the global music industry.
Conclusion
The recorded music industry remains strong, with a total market value of $36.2 billion in 2024. However, the industry is at a turning point. Streaming, while still dominant, is no longer driving growth at the same pace as before. Alternative revenue streams such as merchandise, performance rights, and brand partnerships are becoming increasingly important.
Major labels like UMG and Sony Music continue to thrive, but independent artists and smaller labels are facing challenges due to shifting royalty structures and a growing divide between DSPs and rightsholders. As the industry continues to evolve, adaptation and innovation will be key to sustained success.
For artists, labels, and industry professionals, the future remains full of opportunities—but also significant challenges. Whether through new revenue models, emerging markets, or direct artist-to-fan engagement, the music industry is entering a new era where flexibility and strategic thinking will be more important than ever.
Stay tuned for more insights and updates on the music industry’s latest trends!
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