In 2024, the music industry reported record-breaking profits. The ERA's end-of-year report showed that consumption hit a new high with record-breaking results for volume and revenue last year. Yet within this same year, it was reported that 125 grassroots music venues closed and many of those that remain operating at a loss. So where does the money come from and what played the biggest role in profit contributions in 2024?
It’s no secret that streaming has been the primary profit maker for the music industry for nearly ten years now. The ERA reported that subscriptions and purchases (CDs, LPs, cassettes and downloads) of recorded music reached $2,969m in 2024, overtaking the “previous high” of $2,760m in 2001. ERA chair Linda Walker said: “We are witnessing a fundamental shift in the dynamics of the entertainment business. Digital services and retailers have become the drivers of the market. For decades, it was new release activity that drove most of the revenues. In 2024 subscription sales are now a far more significant factor.”
Overall, of the total recorded music market last year, streaming contributed to 85% of sales and physicals only 13%, with downloads contributing to the latter. The reported surface numbers don’t even account for what it means to be a recording artist at present or why royalties from streams don’t always equate to the same as physical purchases. In 2024, Spotify, Apple Music, YouTube Music and Amazon saw retail revenues from music streaming increase by 7.8% to $2.51bn. That figure represents 84.5% of the total reported profits of last year.
Major labels “in a flurry of consolidation, went from five to three… so the market has been concentrated in the hands of fewer companies”. While it is no surprise to see Sony and Universal Music Group sitting at the top end of revenue in 2024, it was also a year some historic labels got their mojo back, one being Island Records, founded in 1959 by Chris Blackwell and evolving into the home of legends like Bob Marley and Cat Stevens.
The industry's contribution to the UK economy was up by 13% to a record $9.4bn and yet this same year, it was reported that we saw at least two grassroots venues close a week. Does the shift we are seeing sum up the industry in a digital, post-COVID age? It was said that superstar acts including Elton John, Beyoncé, Coldplay and Ed Sheeran embarked on Covid-delayed tours to cash in on pent-up fan demand for live shows.
From labels to artists, big names were the cash cows that contributed to the industry's success in 2024.
Who’s to say what 2025 will bring; industry trends for 2025 predict that what we have seen this year will likely be the new normal. With new streaming services on the horizon, AI finding it’s place, alongside the revival of punk, it’s definitely going to be interesting to see where the profit figures will sit at the end of it all. Perhaps 2025 will be a pivotal year for the industry.
