Breaking down the 2025 Global Music Report

I spent a greater part of the long weekend reading the "Global Music Report 2025," which was published earlier this year by the International Federation of Phonographic Industry (“IFPI”). IFPI is the organization the represents the interests of the recording industry across the world. IFPI’s mission is to promote the value of recorded music, campaign for record producer rights, and expand the commercial uses of recorded music. The IFPI’s services to its members include a legal & policy programme; representative litigation; content protection; sales reporting for the recorded music market; and insight & analysis in the areas of performance rights, technology and trade. The Global Music Report analyzes the state of the music industry, highlighting growth trends, challenges, and the role of record labels in supporting artists and innovation. Here are my key takeaways from the report.

Music formats

Global revenue from recorded music reached USD 29.6 billion in 2024, representing growth of some 4.8%. This revenue was driven by streaming - which made up 69% of revenue; physical sales - which accounted for 16.4% of revenue; performance rights (i.e the use of sound recording and music video in public performance and broadcasting) - which accounted for 9.7% of revenue; digital downloads and other digital uses - which contributed 2.8% to revenue; and synchronization (i.e. the use of recorded music in films, TV, advertising and gaming) - which accounted for 2.2%. 2024 saw a 3.1% dip in revenue from global physical sales, demonstrating the diminishing role of physical sales and the digital revolution that has upended the consumption and monetisation of recorded music over the past 2 decades (for context, while streaming income was non-existent and physical sales made up 93% of revenue in 2004, by 2014 physical sales contributed 40%, digital downloads and other digital uses contributed 29.4%, and streaming revenue contributed a mere 14% to total revenue). It was not all doom and gloom in the physical format category though, as vinyl revenues experienced an 18th consecutive year of growth. In the streaming category, global revenue crossed the USD 20 billion mark for the first time ever, with subscription-based streaming contributing 51.2% and non-subscription-based streaming (i.e. ad-supported streaming) accounting for 17.7% of total recorded music revenues. This represented 9.5% growth for subscription-based streaming, with 752 million global users of subscription accounts as at the time the data was compiled. Ad-supported streaming formats grew by only 1.2%. The message is clear - digital is the dominant format for music consumption and it will grow on the back of subscription-based streaming.

 Music markets

Every region in the world saw growth in recorded music revenues in 2024. Middle East & North Africa (MENA) was the fastest-growing region with a 22.8% increase in revenue. Sub-Saharan Africa was next with growth of 22.6% and revenue which exceeded USD 100 million for the first time ever, while Latin America followed closely with 22.5% growth. Europe’s revenue grew by 8.3%, USA and Canada saw a modest growth of 2.1%, and Asia’s revenue saw a 1.3% uptick. US & Canada are the largest market by region, accounting for 40.3% of global revenues in 2024, followed by Europe, which accounted for 29.5% of global revenues. In terms of countries, the top 10 music markets are USA, Japan, UK, Germany, China, France, South Korea, Canada, Brazil and Mexico. Africa’s biggest market by country is South Africa, which accounted for 74.6% of Africa’s revenues in 2024.

What do the figures mean for Ghanaian artists, and music right holders?

The report emphasizes the value of investing in music and its related business in an increasingly digital world. The emergence of web2.0 posed serious challenges for music right holders through digital reproduction of music and sharing of music files through peer-to-peer networks. This led to 13 consecutive years of decline in global revenues from recorded music, with revenues dipping from USD 21.8 billion in 2001 to USD 12.9 billion in 2014. The ongoing bullish run has largely been powered by streaming revenues and with the global rise of afrobeats and music from Sub-Saharan Africa, it is time for Ghanaian artists and music rights holders to examine what is required to increase our revenue share and establish Ghana as a leading music market.

One may ask, how representative is the data? Is it possible that the report does not track data from Ghanaian exploitation of recorded music? Such a notion, if probable, would be limited to physical sales, performance rights and synchronizations because most Ghanaian music right holders may not feed the IFPI with data on those activities. When it comes to streaming, that possibility is remote because the IFPI has access to data from most streaming companies and the global shift from physical sales to digital streaming is very relevant in the Ghanaian context. Further, it is no secret that Ghana has not implemented policies and measures to ensure that music rights holders benefit from performance rights and synchronizations so, in the current state of our politico-legal and practical framework, the lowest hanging fruit in terms of revenue streams for Ghanaian music right holders is streaming revenues.

So, what will it take for Ghanaian music right holders to make more money from streaming? Are streaming revenues a function of population size? Not really. India is the most populated country in the world but it ranks 15th among the largest recorded music markets by annual revenues. Nigeria is far more populous than South Africa, yet its revenues dwarf in comparison to South Africa’s - Nigeria is not even the 2nd biggest recorded music market in Africa by revenue. All this means is that population is key but it is definitely not the decisive factor. What really is, then? Some of the important variables include:

·       subscription pricing: streaming platforms charge different fees per market based on market dynamics like ability to pay, currency exchange rates, advertising spend, etc. Consequently, streams from countries where the streaming platforms obtain more revenue pay better than streams from lower earning territories;

·       account type: Premium streams pay more; free/ad-supported pay less; and

·       platform policies and pay out model: some streaming platforms like Spotify pool revenue by country and divide by total streams—so a music right holder’s share may vary each month. Others platforms do not. Ultimately, this affects how much is paid out by such platforms to Ghanaian right holders.

What all this means for music rights holders in Ghana is that factors such as your listeners’ locations and whether they’re on free or paid streaming plans are critical when determining your actual earnings - which affects how much revenue Ghana makes from its recorded music. If you’re an artist in Ghana with a largely domestic audience that listens to you through ad-supported platforms, you’re likely to make less than a Ghanaian artist with a more global audience who have signed up for subscription-based platforms.

What do the figures mean for Ghanaian policymakers, investors and the Ghanaian economy?

The national importance of streaming becomes more apparent when streaming dynamics are viewed within the traditional lens of imports and exports. Domestic streaming of foreign music is akin to importing from the market the streamed songs originate from - the revenue flows back to the originating market and increases its ranking as a high grossing market. In the same vein, when a country’s artists gain an international audience, it is akin to an export from that country and the revenue flows back to that artist’s home country. In short, the global success of domestic artists is a matter which should concern national policymakers because their success boosts national economic growth. Within this context, having a domestic import substitution policy for music consumption would mean having a policy that prioritises domestic consumption of homegrown music over foreign music. South Africa has policies in place to promote local music on radio stations, and this will naturally affect music streaming behaviours.

Ghana cannot replicate this approach without doing more to clamp down on piracy and build a society where people are motivated to pay royalties for exploiting music rights. Markets with efficient royalty collection and enforcement structures will capture more value by preventing revenue leakages to ensure that those who invest in music reap their just rewards. Access to affordable smartphones, internet, and mobile payment systems will also facilitate the growth of our streaming revenues so Ghanaian music right holders will benefit from the Government’s drive to increase internet penetration, mobile adoption and payment solutions.

Finally, financing makes music and artists more attractive and commercially viable. In today’s digitally connected and highly competitive world, finance plays a crucial role in driving innovation, connecting artists with their fan bases and introducing them to new audiences through creative marketing campaigns. Streaming, especially, has made music a viable business case with palpable and verifiable cash flows. Streaming royalties are credited directly into designated bank accounts, removing the risks associated with handling logistics and tracking sale proceeds for physical formats. These facts should crowd in investments from high-net-worth individuals and institutional investors in Ghana, just as it is doing abroad, where music companies and music rights are being viewed as an alternative investment asset class and attracting M&A deal flow, especially from private equity firms. Just this week, Sony Music Publishing announced its acquisition of Hipgnosis Songs Group, an entity owned by a parent company that has been at the forefront of the campaign to treat music rights as investment grade assets. In 2024, Hipgnosis sold another of its entities, the Hipgnosis Songs Fund (a Hipgnosis entity which owns 138 music catalogs containing copyright and/or income streams from more than 40,000 songs) to Blackstone (the world’s largest private equity firm by AUM) for USD 1.6 billion. After the acquisition, Blackstone led Hipgnosis to raise USD 1.47 billion in bonds through an assets backed securities transaction involving the securitization of music royalties from artists such as the Red Hot Chili Peppers, Bon Jovi, and 50 Cent. You can be sure that after investing all this money to acquire these music assets, more money will be pumped into making the assets generate more income through viral hits and social media trends that Ghanaians will unknowingly participate in.

What do you think? What can we do to ensure that Ghana takes full advantage of the music streaming and to open financial pathways for Ghanaian music companies, most of which are owned by Ghanaian artists themselves? IFPI recommends that policymakers should protect and support the competitiveness of the global music marketplace, which is built on the ability of artists to freely develop commercial partnerships without interference and based on exclusive rights and legal certainty. In Ghana, this remains a pipe dream. Even after artists are left without policies to drive domestic consumption of their music or derive significant value from the domestic commercial  exploitation of their music rights, and after Ghanaian music has been shunned by the investment community, Ghanaian artists are subject to policies and legal restrictions which prevent them from having commercial partnerships with very companies whose products are customarily patronized together with music in the entertainment industry - alcoholic beverage companies and gaming companies. I will continue to assert that these are anachronistic restrictions, borne out of the erroneous view that in today’s digital world, Ghanaian masses are more influenced by musicians who are physically present in Ghana than those they watch and follow through new media platforms. This view is misguided because factors such as wealth and commercial success add to the star power of entertainers, so by enforcing these restrictions, Ghanaian policymakers are reducing the star power and influence of domestic entertainers to the benefit of the foreign artists who are amassing wealth by partnering with such companies. Such partnerships must definitely be regulated through reasonable limitations and the requirement for such partnerships to necessarily include advocacy on addiction and the risks associated with such activities. However, an outright restriction in Ghana even though such companies are multinationals who sponsor popular foreign sporting and entertainment events, teams and players is simply counterintuitive.

Is there anything you agree or disagree with? Did you find the data striking in any way? Let’s engage.