Levelling the playing field for independent music companies and their artists across Europe
European music in numbers
IMPALA represents over 5000 independent music companies and national associations across 30 countries in Europe.
IMPALA Sales Awards represent over 150 million albums sold and €2 billion in revenue.
The music sector consists of thousands of independents and 3 multinationals – “the majors”.
99% of music businesses are micro, small or medium sized enterprises – “the independents”.
The independents are the innovators and early adopters, discovering new talent and producing 80% of all new releases. The independents also account for 80% of the sector’s jobs.
The collective market share of the independents is nearly 40%. Majors dominate the top 100 charts, as they account for over 95% of market share for the top hits across all genres.
In 2018, record companies invested $4.1 bn in discovering and nurturing new artists (A&R).
In 2018, 81% of Merlin’s members – the global digital rights agency for independents – saw their overall business grow, with 30% stating that business was up by more than 50%.
54% of Merlin’s members surveyed in 2019 reported that digital income accounted for more than 75% of their overall business revenues.
In 2017, 31% of the independent labels’ revenue came from foreign markets, and 77% of artists signed to independent labels chose to renew their contract.
European cultural & creative sectors account for 4,4% of EU GDP and 12 million full-time jobs.
The European music sector specifically is supporting 2 million jobs, contributing €81.9 billion in gross value added to GDP, and exporting €9.7 billion worth of goods and services to countries outside the EU27 and UK.
Europe generates over one third of global recorded music revenues.
Europe’s share of the global recorded music market was29.9% in 2020, with a total of $6,5bn revenues – a growth of 3.5% year on year.
Streaming revenue in Europe grew by 20.7% in 2020, to $3.86 bn, representing 59.4% of the total European recorded music market.
In Europe, subscription audio streams grew by 19.2% in 2020.
Despite a decrease of $180.3m in 2020 (-13% year-on-year change), Europe remained the top region for performance rights revenues with $1.2bn accounted for 50% of the world’s performance rights income in 2019.
In Europe, physical revenues fell $183.8 million (-13,8% year-on-year change), but Vinyl sales increased by 19.3% year-on-year (2020).
In 2020, Europe represented around a quarter of all users of subscription services globally.
Copyright-intensive sectors account for 9.9 million EU jobs.
Copyright-intensive industries make a positive contribution to the EU’s trade balance: net export of €15bn.
In 2020, global recorded music revenues totalled $21.6 billion. An increase of 7.4% compared to 2019.
The music industry’s digital revenues (including streaming) now represent 67.9% of total revenues (2020).
Streaming revenues specifically grew by 19.9% (year-on-year)to represent 62.1% of the total market (2020), up from 55.7% on 2019. Subscription streaming represented this year again the bulk of total streaming revenues (73.9% – +18.5% increase year-on-year), but ad-supported streams and video streaming revenues also increased by 24.7% and 23.3% respectively (year-on-year change). Revenues from video stream therefore continue to represent the smallest increase across all streaming revenues by sub-format.
Number of users of paid subscription accounts grew by 28.3% to 443 million in 2020 (341 million in 2019), increasing associated revenue by 18.5%.
Streaming aside however, digital revenues saw a drop of 15.7% this year.
Synchronisation revenues declined by of 9.4%, representing 2% of overall revenues, after a growth of 4.4% the year before. This is mainly due to delays caused by the pandemic.
Performance rights revenues declined year-on-year by 10.1% also due to the pandemic.
Physical sales faced a decline of 4.7% (2020), once again due to shops closing because of the pandemic. Despite this, vinyl revenues grew for the 14th consecutive year, driven by online sales, special editions as well as Record Store Day promotions. Vinyl sales were up $169m this year and grew by 30% in the UK to become a $100m format.
50% of top tracks played on radio and downloaded in Europe are American.
Record companies invested $4.5 bn in research and development and marketing in 2015, representing 27% of these companies’ revenues.
As a whole, the music industry invested 16.9% of its revenue in research and development for new artists in 2015. It is higher than other research-intensive industries (e.g. pharmaceuticals and biotechnology 14.4%, software and computer services 10.1%, aerospace and defence 4.5%, etc.).
IPR‐intensive industries pay significantly higher wages than other industries, with a wage premium of more than 40%, with copyright-intensive sectors having the highest premium (69%).
Digital services and social media
There are more than 230 digital music services available across the EU, providing access to more than 40 million tracks.
6 of the top 10 most liked people on Facebook are music artists (updated: June 2016).
7 of the top 10 most followed people on Twitter are music artists (updated: June 2016).
9 of the top 10 most watched videos of all time on YouTube are music videos. Out of the top 20, 18 are music videos (updated: June 2016).
The value gap
YouTube makes up 47% of on-demand music streaming
Video streaming overall makes up 52% of on demand music streaming (paid audio streaming 28% & free audio streaming 20%)
In 2017, with 272m users audio streams (paid & free) generated $5.569bn, while video streams with 1.3bn users generated $856m
Globally, 38% consume music through copyright infringement.
Spotify paid record companies $20 per user in 2015 while Youtube returned less than $1 for each user.
Merlin members report that video streaming services command 10 times more users than audio streaming services – but return less than 10% of the revenues
On the perception of online platforms by Europeans, a Harris Poll (2019) found that:
64 % of Europeans polled believe that over the past 5 years the European Union has not done enough to regulate the power of the U.S. Tech Giants.
74 % of Europeans think that when the Tech Giants speak out on an issue, they do so to protect their own economic interests rather than the public interest.
80% of Europeans are in favor of the European Union implementing rules to guarantee the remuneration of artists and content creators for the distribution of their content on internet platforms.