What 2022 Music Industry Data Predicts for the Industry in 2023
What 2022 Music Industry Data Predicts for the Industry in 2023
Posted on 10 January 2023
An analytical market report on the music industry in 2022 has predicted that even if the global economy is in for a challenging year, there are several indicative factors that point towards a positive future for the music industry in 2023.
That is not to say the industry won’t go through a shake-up. Some markets will perform better than others. But it is a reason to hold out some hope for the future of music. And more importantly, rally against the cries that the music industry is already dead in the water.
It is, of course, expected that the market analysis report of music in 2022 showed positive signs of growth following the previous pandemic years. However, the performance in some sectors has outperformed several analysts’ expectations.
Record Labels Marked a 14.3% Increase in Revenue
Love or loathe them; record labels will always be integral to the music industry. Their annual performance through 2023 proved that plenty of people still have a ravenous appetite for music. Furthermore, they’re willing to part with their cash for it!
In 2021, the experts in entertainment research MIDiA forecasted an 11.8% growth for 2022. Their expectations were exceeded by a 14.3% upturn. Even after Q4 was heavily hit by the downturns in the wider economic market.
In any industry, double-digit growth, regardless of how tough the environment, is a commendable performance, which bodes incredibly well for the music industry in 2023. If record labels get their way and squeeze more of the $12 billion in revenue from TikTok as compensation for the number of plays licenced music gets on the app, music label income in 2023 will skyrocket exponentially! One of the four major labels is currently trying to prise 2x – 10x more revenue from the app.
Publishers Outperformed Labels in 2022
Music labels weren’t the only domain in the music industry in 2022 to mark a phenomenal rise. Music publishers saw an increase of 21.1%. Which came down to the rise of historic digital royalty settlements, the dynamic rebound of income for traditional performances, and improvement within the domain of streaming royalty sharing.
Music publishers made massive strides in 2022 to ensure that artists, songwriters, and composers receive a fairer cut for their creativity and talent. The drastic increase in revenue that made its way to creators reflects the hard work on behalf of the publishers. It’s funny how that good news didn’t make the rounds on social media along with the other disparaging commentaries!
In addition to ensuring that artists receive their royalties, music publishers also help to generate additional opportunities for artists, which is easier said than done in the complex digital market. If you are an independent artist looking for a new music publisher, DCD Media PLC, The List, and Zappar are all highly credible UK-based publishers worth looking into before you gun for the major-league publishers.
The Consumer Demand for Digital Streaming Platforms Increased
The revenue growth for digital streaming platforms saw a far more modest increase of 6.2% through 2022. That statistic was pulled down slightly by the failings of Tencent Music Entertainment which has dramatically slowed down in China. Yet, Spotify pulled up the figures with its 7.7% global market growth.
So, all those articles you saw about everyone cancelling their Spotify subscriptions due to the cost-of-living crisis didn’t show the full picture. Neither did the news articles swarming around artists pulling their music from the platform and demanding you jump ship due to Joe Rogan spreading misinformation with his podcasts! It already feels like it was another lifetime ago, but it was only in February 2022 when Neil Young and Joni Mitchell, amongst others, threw their public tantrum.
The Live Music Industry’s Mercurial Year Spells an Uncertain Future in 2023
Live music started to make a strong comeback with markable and predictable growth following the pandemic. Once restrictions lifted and music fans lost their hesitancy over being in overcrowded spaces, there was strong consumer demand for gig and festival tickets.
However, the good times could only last so long for many music fans who had to find ways of cutting back their expenditure when the recession officially hit in quarter three of 2022. After many music fans reported that heading to live music events and going out is one of the first things they will cut back on, the live music industry is unlikely to see the same prosperity as digital streaming platforms and music rightsholders.
How the Lipstick Effect Will Trace Across the Music Industry in 2023
If anything is the epitome of a self-fulfilling prophecy, it is the phenomenon of the recession. As consumers adopt a spend less, save more approach to their budget, companies anticipate the slowdown by reducing their output, which, in turn, hits revenue growth, impacts suppliers and leads to redundancies.
The nature of recessions is something that artists should consider when making their next move. However, given all the other trends in the music industry, there is still evidence that streaming and music rightsholders can thrive through the onslaught of the recession which is expected to trim 1.3% off GDP growth. This is due to the lipstick effect.
The lipstick effect is a psychological theory born from economic observations made in previous recessions, which noted that during times of financial pressure, consumers veer away from big-ticket items and focus on less expensive luxury goods, such as designer lipsticks.
Like a £30 lipstick, music subscriptions, records, CDs, and merch fall into affordable luxury category. After all, music fans need some entertainment if they can’t afford to see their favourite artists performing live!
In conclusion, the general performance of the music industry through 2022 laid down several cornerstones to ensure that despite the recessionary conditions, independent artists still have a viable path to walk down. It may seem surreal to suggest the overall picture for 2022 was positive. But the data doesn’t lie!
A&R Factory will share more tips for independent artists to make the best out of the industry through 2023. Follow us on Facebook and Instagram to keep up with all the latest music industry trends and news! For one-to-one advice, contact our artist development team for more insight and support.
Article by Amelia Vandergast