UK record industry overtakes Germany in IFPI’s global rankings

The UK was officially a bigger recorded music market than Germany last year.

We know what you’re thinking.

How can that be the case when, earlier this year, we learned that Germany’s business grew significantly more than the UK’s and – as MBW put it – ‘widened its lead’ over its European peer in 2015?

Well, both assessments are correct. It’s all about the metric you use to judge the markets’ performance.

Arguably, IFPI’s numbers – which appear in its Global Music Report 2016 – are what matter most.

Germany grew faster than the UK on a retail basis last year (and the BVMI has recently updated the market’s official 2015 stats to an even more impressive level than originally reported).

Yet just because more money was handed over at tills, that doesn’t mean cash coming into labels and artists followed the same pattern.

IFPI’s wholesale figures, which include sync and performing (neighbouring) rights, show the the UK’s recorded industry income grew 0.6% last year to $1.354bn (£880.1m).

Germany’s income (remember, on a wholesale basis) fell 0.3% to $1.309bn (€1.179bn) in the same period – enough to relegate it to No.4 on IFPI’s rankings behind the UK.

As such, the UK has officially becomes the world’s No.3 market.

The reason for the UK’s climb (other than the standout performance of artists such as Adele, pictured) is because record companies get a far more generous margin on digital music than they do physical – especially when it comes to streaming.

Germany’s total (wholesale) recorded music business was 60% physical last year, with 25% of money coming from digital and the rest made up of neighbouring rights and sync.

The UK’s income was just 35% physical with 44% of revenues coming from digital – leaving 21% to sync and neighbouring rights.

In fact, on digital alone, the UK is the world’s second biggest market – taking 9% of the global cash last year.

The No.1 digital market, the USA, laid claim to 49% of the world’s digital money.

Overall, the USA, still comfortably the world’s biggest recorded music market, grew 1% on a wholesale basis in 2015, up to $4.997bn, with digital taking a 66% slice.

Japan, the world’s second biggest market, saw 3% growth to $2.447bn, with physical taking 75% and digital on 18%.Music Business Worldwide

Related Posts