1/15/2018 Global Music Markets – Preferred Music Formats and Genres - Angry Mob Music

Global Music Markets – Preferred Music Formats and Genres

Global Music Markets – Preferred Music Formats and Genres

 September 29, 2016  Marc Caruso  Blog, News

The music that songwriters create is as broad as the way it is consumed and even appreciated.  Some countries prefer streaming while
others want to have a physical CD in their hands. Furthermore, some nations are more inclined to listen to EDM through a paid streaming
subscription than download a pop album. Every nation, whether through culture or availability, have a preference as to the genre and
medium in which it is listened. Simply put, di erent countries want to listen to di erent genres, and the way they purchase and listen to
that music varies the same.

To shed light on this topic, we have analyzed the music industry as a whole and the top 5 countries with the lion’s share of music
sales  (United States, Japan, Germany, United Kingdom and France)  to discover what they listen to and whether consumers are more
partial toward  digital (Downloads & Streaming) or physical (CDs & Vinyl) music formats. We will be using market value and  revenue to
indicate format preference. Our analysis is based on statistics released in 2015 and 2016.

2015 Global Revenue & Top Genre

When we last touched on digital U.S. revenues in our blog, Streaming – The Future of Physical and Digital Albums, we saw that
streaming  grew to be the largest contributor to music
industry revenues in 2015. We can see similar growth in the
industry as a whole.

As the 2016 IFPI Global Music Report shows, streaming

revenue increased 45.2% to become the industry’s fastest-
growing revenue source at  $2.9 billion. Even with
downloads falling by 10.5%, digital revenues rose to $6.7
billion, surpassing physical for the rst time as the primary
revenue stream with 45% of industry revenue (39% for
physical revenue). The IFPI also said, “Digital revenues now
account for more than half the recorded music market in 19
markets.” Within digital revenue, downloads remain the
frontrunner with 45% ($3 billion) of generated revenue
while streaming is close behind at 43%. By using these
numbers as an indication to preference, we can assume
that digital  is the preferred form of music consumption. If statistics stay on path, we will continue to  see physical and downloads fall
as streaming rises to keep digital a oat as the primary listening format.

In regards to music preference, Spotify released a global study of its users and library showing that hip-hop is their most streamed genre.
They were able to come to this conclusion by analyzing almost 20 billions songs and the listening trends for over 1000 cities.

Largest Music Markets: Format Consumption / Genre Preference

United States – $4.9 Billion Trade Value

When we look at RIAA’s 2016 Mid-Year Shipment and Revenue Statistics, we can clearly see  that digital owns the music industry  with
about 80% market  value. Streaming grew by a staggering 57% year-over-year to remain  the single largest contributor to U.S. music

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revenues at 47%.   Digital downloads saw a 17% dip in the rst half of 2016 and was
accompanied by physical’s decline of 14% since the rst half of 2015.

When it comes to the United States’s overall favorite music genre, Rock ranks #1. However, if we
look at the top genre based o of the most popular listening format (Streaming), R&B/Hip-Hop
takes the cake. Nielsen Music put together a few stats (below) which notes the  top genres by
overall consumption and speci c format.

Conclusion: Digital / Rock

Japan – $2.6 Billion Trade Value

According to IFPI’s 2016 State of the Industry Report, Japan’s music market accounts for 76% of Asia’s trade value, making it the
second largest market in the world. Even with digital taking over physical sales globally, physical remains Japan’s primary format choice
and contributor to market pro ts. Physical formats, including CDs and vinyl, contribute to approximately 75% of Japan’s revenue. On the
other hand, streaming accounts for less than 5% of revenue but helped the nation achieve its  rst increase in music sales (3%) in years.

Japan has not necessarily landed on its feet yet with the introduction to digital. As other nations embrace and actually capitalize on
market growth, Japan’s cultural apprehension to change, love of collectables and licensing/rights restrictions has hindered their ability to
evolve and grow. With the future growth of streaming, it will be interesting to see if it can become more widely accepted without
cannibalizing Japan’s physical market.

J-Pop. Probably no surprise that J-Pop is the most popular genre in Japan. If aren’t already familiar, it’s a mixture of modern pop and rock
with Japanese sensibilities and in uences. Watching HERE is easier than explaining.

Conclusion: Physical / J-Pop

Germany – $1.4 Billion Trade Value

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Germany’s music market falls in line

with Japan’s format preference for
physical. 2016 gures reveal that
physical formats accounts for 60%
of trade revenues while digital only
sits at 40%. As CD sales continued to
slide (down 9.6%) in the rst half of
2016, the market was salvaged by an
88% leap in streaming and 46.2%
growth in vinyl, resulting in 3.6%
market growth. CD sales currently
have 52.3% of market share along
with vinyl at 4.3% to make
physical the main music format that
Germany consumes. We will most
likely see a slow decline in physical
sales as  digital becomes folded into
Germany’s purchasing habits.

Rock/pop are lumped together as

the most popular genre in Germany.
Most of the music on German charts are from American artists but Schlager and traditional folk are alive and well.

Conclusion: Physical / Rock & Pop

United Kingdom – $1.3 Billion Trade Value

The UK music market saw a

4% increase in 2015 sales
with the most help coming
from streaming (up 82%). In
2015, streaming made up
22% of music consumption to
help digital music formats
account for more than 54% of
all music sales.

There was a 0.5% drop in

physical music sales but the
64% growth in vinyl
prevented even further
declines. Even with  CDs still
making up 66% of all album
purchases, 2015  sales
were down by 3.9%.

The apparent trend is that

digital downloads and
physical sales will continue to
slowly decline  as streaming experiences further  growth. It will be di cult to predict  where  the  di erent formats will level o
as physical/downloads decline and more streaming consumers get converted into paid subscription accounts.

In conclusion, digital’s 54% market share is enough to be the preferred music format for the United Kingdom.

Pop nally beat out rock to become the most popular music genre in UK. Pop now has the largest market share for album sales at 34.5%
and 36% for single sales while rock has 33.2% for albums and 24.3% for singles.

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Conclusion: Digital / Pop

France – $843 Million Trade Value

According to SNEP & MIDiA, France’s

music market has seen better times as
it experienced a 7% decline in 2015.
Streaming was the only music format
that increased around 47% while
physical sales declined 16% and
downloads by 21%. Streaming was
the  primary driver for digital’s  14.7%
growth but reduced downloads
resulted in digital attaining only 36% of
market share. Even though physical
sales fell, it still owns 42%  of France’s
music market and continues to
be France’s preferred music format.

Once most notably known for their

romantic and classical music, France
continues to be a  pioneer for
innovation. Chanson, electronic, hip-
hop and dance all play a signi cant role in French music but French pop is the genre that separates itself from the pack  as a mixture
of pop with, you guessed it, French in uences.

Conclusion: Physical / French Pop

CONCLUSION

There is a de nite battle between physical and digital preferences for the Top 5 countries. However, statistics point to  one  common
occurrence – both physical CDs and digital downloads are in a decline while streaming continues to grow in every country. Streaming has
been instrumental in stabilizing, if not improving, market growth for each of the  selected countries.   As such, streaming has
supported digital in becoming the world’s primary revenue source. Japan, Germany and France still might have physical as the preferred
music format, but the encroachment of digital will likely create a niche market for physical music consumption. The future presence of
this dated format is still yet to be revealed as the ashes of the digital explosion have yet to settle. In regards to genre, does Pop ever get
old?

Sources:

IFPI Global Music Report 2016

Nielsen 2015-year-end-music-report
RIAA’s 2015 Year-End Industry Shipment and Revenue Statistics report
The Recording Industry Association of Japan (RIAJ)
BPI 2015 Music Market Report
Music Business Worldwide
Japan Times
Digital Music News

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