Music Industry Earnings Review – What 2022 Tells Us About 2023

With 2023 set to be a challenging year for the global economy, it’s a good time to see how the music industry has performed over the past year. I have been there.Music Industry Earnings Q3 2022: Pre-Recession Growth. We’ve tracked the performance of leading labels, publishers, DSPs and live companies around the world to create a complete picture of how the music business is performing across rights, distribution and live. Here are some highlights that provide useful guidance on how 2023 will shape up.

Below are key revenue growth trends for Q1-Q3 2022 compared to Q1-Q3 2021.

• Record labels were up 14.3%, higher than MIDiA’s 11.8% forecast at the start of the year, but full-year numbers are final as the fourth quarter is expected to be the worst-hit quarter by the recession. could approach 11.8%. 12% better than 14%. That said, double-digit growth in such a challenging economic environment is a commendable achievement and bodes well for 2023.
• Publishers were up 21.1%, outperforming labels, reflecting factors such as the impact of past digital royalty payments, improved share of streaming revenue (especially non-DSP), and recovery in traditional performance revenue. Publishers have worked hard over the last few years to get the bulk of their income to songwriters.
• DSP revenue grew modestly at 6.2%, but was tempered by a dramatic slowdown in the Chinese market, where Tencent Music Entertainment’s revenue remained flat. Spotify posted a stronger performance (7.7%), which is broadly in line with major label streaming revenue growth of 7.3%. Subscriber growth across all businesses is up by more than 10 points, showing consumer demand for streaming to be strong heading into his 2023.
• Live continued its post-corona recovery, experiencing dramatic growth and benefiting from still-strong underlying demand from both consumers and artists eager to tour again. The main thing it says it will cut back on is going out and going to concerts, which could make gigs next year more difficult than music rights holders and DSPs.

Recessions tend to be self-fulfilling prophecies, with companies slowing spending in anticipation of a slowdown to come, resulting in lower earnings growth for suppliers, who pass on the same savings to others. increase. Despite all this, music rights and streaming may well sit in the recession.

lipstick effect

When it comes to music, it’s in lipsticks everywhere. During the previous recession, lipstick sales skyrocketed. It represents an affordable luxury for consumers who can no longer afford the expensive items they used to save or buy. As an affordable luxury may play a role.

The early 2020s saw an influx of capital into the music business. Music rights held promise as an asset class uncorrelated with the wider economy. Ironically, as investment in music catalogs has slowed (due to rising cost of capital), the performance of the music business in the first nine months of 2022 has been weighed down by the industry’s actual recessionary conditions. It suggests that we are setting a path that will not be taken. As much as many other industries. Of course, there were some concerns, but the overall picture so far has been positive.