Major labels’ revenues jumped in 2021, but what does that mean?


2021 has been an abnormal year for the recorded music market. Two of the majors went public, the pandemic continued to disrupt the market, and major record companies’ revenues grew at an unprecedented rate. If fourth-quarter majors’ revenues follow similar seasonal patterns to previous years, revenues from music recorded collectively by the majors will increase by 29% in 2021, reaching $ 19.6 billion (a more bearish estimate is $ 19.3 billion). By comparison, the growth of 2020 was 6% and that of 2019 was 10%. In other words, majors’ revenues grew by $ 787 million in 2020 and $ 4.4 billion in 2021. 2021 was a red year for the majors, but was it about? a unique moment or a pivot of the industry?

To get the answer, we must first contextualize the revenue growth of top brands within the larger market.


As you might expect, streaming was the main driver of major label revenue growth in 2021, accounting for 67% of revenue, and up 31% to $ 12.8 billion. This level of annual streaming growth has not been observed since 2016. Streaming growth in 2020 was 18%. But the main streaming player, Spotify, has seen that kind of growth. Spotify’s revenue for the year 2021 is expected to reach 9.6 billion euros (which would represent an increase of 22% compared to 2020), and if we only consider the premium growth (i.e. the part that is not boosted by podcast revenue), then the growth was only 19%. And it’s not as if Spotify is losing much ground in the global streaming market – its subscriber growth was largely in line with the global market average (excluding China). So the majors have increased streaming faster, somewhere beyond Spotify.

The total market

The growth in total revenues of the majors is also following a different trajectory than that of other market segments. 62% of global label revenues in 2020, so they are shaping global growth trends):

  • WE: Growth of 27.1% (S1) – RIAA
  • Japan: -1.0% (January-November) – RIAJ
  • UK: 8.7% (fiscal year) – ERE
  • Germany: 12.4% (S1) – BVMI

(It will be interesting to see how the IFPI allocates the revenues. There may well be a fairly large discrepancy between their grand total and the sum total of all individual countries if this is indeed largely due to one-off payments rather than one-off payments. to organic payments, country income level.)

All of this means that the further growth of the big labels probably reflects factors such as:

  • Large one-time payments from ByteDance, Twitch and Facebook
  • License revenues of the same parties
  • Increased contribution from other markets
  • Increased market share through catalog acquisitions
  • Income growth for independent retailers
  • Organic growth in market share

While all of these factors are at play, it’s the first two that are probably the most important. MIDiA estimates that these new sources of non-DSP streaming revenue were between $ 0.8 billion and $ 1.2 billion in 2021. Even at the lower end of the estimates, these revenues alone would have resulted in the same growth in 2021 as all of them. the revenue growth of the major labels combined. in 2020.

It is clear that the revenues of post-digital service providers (DSPs) are now becoming a central growth engine for the recorded music industry. Obviously, a very beneficial tale to have had in a year of IPO, especially if the trend was accentuated by one-off payments and settlements – which would help explain the divergence between the growth of the big labels. and the growth of the local market.

There are two main potential scenarios:

  1. Upfront payments for post-DSP streaming partners exceed medium-term organic revenue, resulting in slower growth rates in 2022 and 2023
  2. Post-DSP streaming partners meet / exceed expectations, making 2021 and 2022 look a lot like the late 2000s and early 2010s for DSP streaming, with minimum guarantees most often

So by 2023 we should be able to tell if 2021 was a peak or a pivot point. If I were a bettor, I would probably put money on prospects closer to 2 than 1.


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