What Happened to Global Music Industry?

The global music industry has demonstrated remarkable resilience and growth in recent years, marking its eleventh consecutive year of expansion in 2025. This sustained upward trend saw global recorded music revenues reach an unprecedented $31.7 billion, representing a 6.4% increase over 2024, according to the IFPI Global Music Report 2026. This growth rate accelerated from the 4.7% observed in 2024, signaling a robust and dynamic market.

Streaming continues to be the undisputed engine of this growth, comprising 69.6% of the total recorded music market in 2025, with revenues exceeding $22 billion. Paid subscription streaming, in particular, saw an 8.8% increase, reaching 837 million subscribers worldwide by the end of 2025. This underscores a deepening engagement with paid digital music services, even as the model matures. However, the ad-supported streaming segment also grew, albeit at a slower pace of 4.3%.

A notable and somewhat unexpected trend is the resurgence of physical music formats. After a slight decline in 2024, physical revenues increased by 8.0% in 2025, driven significantly by vinyl sales, which grew for the 19th consecutive year by 13.7%. This highlights a strong consumer demand for tangible music experiences and collector's items, particularly among 'superfans'.

The financial health of major music groups reflects this industry-wide growth. Universal Music Group reported an 8.7% increase in full-year revenue for 2025, reaching €12.5 billion, driven by strong performance in both recorded music and publishing. Warner Music Group's full-year revenue for fiscal 2025 also saw a 4% increase to $6.707 billion, with significant gains in artist services and publishing. Sony Music Entertainment closed its fiscal year 2025 with a 15% climb in full-year revenue to ¥2.12 trillion ($13.3 billion), powered by streaming, blockbuster releases, and a healthy live events business.

Artist compensation from streaming remains a critical and often debated topic. While total payouts from platforms like Spotify reached a record $11 billion to rights holders in 2025, up from $10 billion in 2024, the per-stream rates for individual artists often remain low. Spotify's 2024 introduction of a 1,000-stream annual threshold for royalty eligibility has further complicated earnings for emerging artists. The industry is seeing a widening gap between top-tier artists with high market share and engagement, and the vast majority of other creators.

Artificial intelligence (AI) has emerged as a transformative force and a significant area of focus for the industry. Major labels are actively pursuing voluntary licensing deals with AI developers, advocating for the disclosure of training data, and seeking robust protections against unauthorized AI-generated music. A landmark multi-year licensing agreement between Universal Music Group and TikTok in May 2026 specifically included expanded AI protections, aiming to promote human artistry and ensure fair economics for artists and songwriters.

Looking ahead to late 2026, the industry continues to adapt. Streaming subscription prices have seen increases across nearly all major platforms, including Spotify, YouTube Music, Amazon Music Unlimited, and Tidal, throughout the year. Regional markets are also showing dynamic shifts, with Latin America leading growth at 17.1% in 2025, followed by MENA and Sub-Saharan Africa (both 15.2%), and Asia (10.9%). China notably overtook Germany to become the world's fourth-largest recorded music market. The industry's current status is one of sustained growth, technological adaptation, and ongoing efforts to balance artist remuneration with evolving consumption patterns.