IFPI Announces Global Figures

The body for the UK recorded sector shared some good and bad news in London April 12. A 3.2 percent year-on-year increase in overall revenue, totaling $15 billion in 2015, marks the first significant growth the recorded music sector has experienced in years.

But the so-called “value gap” curbs the euphoria. While music consumption is as high as ever, rights-holders, above all artists and labels, aren’t seeing much of that “explosion,” as IFPI CEO Frances Moore put it.

She named large ad-funded music distributors that don’t play by the rules as the main reason for this. YouTube is scrutinized above any other service. The Google-owned company is considered a bugbear by many in the industry, as it relies on safe-harbor regulations to not have to negotiate licenses with rights-holders. Such regulations were introduced in the early days of the internet to allow “truly passive online intermediaries,” as IFPI puts it, to start operating without having to traverse the licensing jungle first.

According to the trade body, “the effect is a distorted market, unfair competition and artists and labels deprived of a fair return for their work.”

IFPI exemplifies this with a statistic showing that while 68 million paying music service subscribers generated more than $2 billion in 2015, the vast majority of users, more than 900 million, were using ad-funded services such as YouTube, generating only $634 million for rights-holders. Another key figure of the Global Music Report states that, for the first time, digital revenues ($6.7 billion) overtook revenues from the sale of physical product ($5.8 billion).