Insights #018: Global Music Sales to Hit $53 Billion by 2028

The global music industry is on a trajectory of significant growth, with Omdia's, a tech research company, projecting retail music sales to soar to $53 billion by 2028. This forecast highlights not only the industry's robust recovery post-pandemic but also China's rapid rise in the global rankings. However, a deep dive reveals a more nuanced picture, pointing to additional factors and varying perspectives on the direction the music industry is going.

Omdia's report points to an estimated $5.6 billion increase in the global music market from 2023 to 2028. This growth is fueled by the increasing consumption of digital music and the sustained popularity of streaming services. According to Luminate’s 2023 year-end report, global streams surpassed $4 trillion, which represented a 34 percent increase from the previous year. The industry, valued at $47.4 billion in 2023, is set to surpass the $50 billion mark by 2027 and reach $53 billion in 2028.

Streaming services continue to be the cornerstone of the music industry's expansion. Subscription-based streaming revenue is projected to grow from $25.1 billion in 2023 to $30.6 billion by 2028, accounting for over 57% of total music revenues, and its compound annual growth rate (CAGR) is predicted to be 7.2% over the period. This surge is attributed to the ongoing global growth of streaming platforms, with established markets like North America and Europe seeing steady growth while emerging markets, especially in Asia and Africa, experience exponential increases in consumer use.?

Another aspect of Omdia's forecast is the rapid ascent of China in the global music market. PR Newswire states, “China’s ascent in the global rankings over the next five years is driven by a significantly higher CAGR than Europe’s two leading markets: the UK and Germany. China is expected to surpass Germany by 2026 and the UK by 2027.” China is also expected to become the second-largest music market by 2029, only behind the U.S. This growth is highlighted by China’s increased disposable income for the middle class and the expansion of domestic streaming services such as Tencent Music and NetEase Cloud Music (both being similar to Spotify or Apple Music).

However, other sources provide additional insights that challenge these projections. Midia Research emphasizes the significant investments in Africa and South Korea, with major music companies acquiring local labels and forming partnerships. Warner Music Group acquired a majority stake in Africori, a leading African digital music distribution and rights management company. Similarly, Universal Music Group’s investment in Big Hit Entertainment (now HYBE), the company behind BTS, shows the focus on South Korea’s music scene. Trapital’s analysis points out that while streaming remains a dominant force, companies are increasingly investing in live music and merchandise. This is evident in Live Nation’s acquisition of OCESA, one of the largest concert promoters in Latin America, showing the growing demand for live music in the region.

Major music companies are adapting to the evolving music landscape by partnering with other companies and acquiring catalogs and entertainment businesses. Warner Music Group acquired 300 Entertainment and partnered with various video games. Universal Music Group bought Bob Dylan’s and Sting’s catalogs and collaborates with TikTok. Finally, Concord has diversified its business by acquiring rights in theater and film, leveraging its music assets across multiple entertainment sectors. These movements underline how companies are positioning themselves for the future, particularly as emerging markets climb the global music market rankings.

While Omdia’s projections provide a compelling narrative of growth driven by streaming and China’s rise, the broader industry dynamics reveal a more complex picture. Major music companies are not only focusing on China but are also investing in other regions of the world, indicating a diverse approach to global music diversification and expansion.

References:?

Dredge, S. (2024, July 8). Omdia predicts $53.4bn of global retail-music sales by 2028. Music Ally. musically.com/2024/07/08/omdia-predicts-53-4bn-of-global-retail-music-sales-by-2028/.

Omdia. (2024, July 5). OMDIA forecasts global music sales will reach $53bn by 2028 with China ascending the rankings. Cision US Inc. www.prnewswire.com/news-releases/omdia-forecasts-global-music-sales-will-reach-53bn-by-2028-with-china-ascending-the-rankings-302189620.html.?

Luminate releases 2023 year-End Report. Luminate. (2024, April 25). luminatedata.com/reports/yearend-music-industry-report/?

Stassen, M. (2024, May 22). Warner Music to expand into Lagos with its first fully-owned office in Nigeria. Music Business Worldwide. www.musicbusinessworldwide.com/warner-music-to-expand-into-lagos-with-its-first-fully-owned-office-in-nigeria/#:~:text=In%202022%2C%20Warner%20Music%20Group,in%20Africori%20in%20early%202020.