The global music industry is in flux. The industry had been highly challenged by the shift away from physical sales, which were dominated by CDs. From the 1890s to the 1990s, sales of recorded music had meant sales of physical copies. The 1990s, however, saw the emergence of the mp3 format, along with widespread music piracy. By 1999, the keyword “mp3” had become more popular than the word “sex” as an Internet search term.¹ In 2003, South Korea became the first nation in which digital music sales surpassed physical sales.

More recently, music streaming services, some of them subscription‐based, have revolutionized the music industry and are credited with initiating a gradual restoration of profitability to that industry. In addition, according to some reports, the presence of inexpensive or free streaming services is credited with reducing global music piracy.² Streaming has begun to be heralded as the savior of the industry.

Global music industry revenues rose by 8% in 2017, with sales via streaming subscriptions constituting the industry's largest single revenue source. Companies like Walmart, which had been gambling first on physical (CD) sales and then on sales by download, have missed out. Download revenue dropped by 20% in the same year, while physical sales continued to dwindle.³

Another surprising development has been the growth in popularity of video‐sharing sites like YouTube as a means of accessing music. The ease with which music videos can be accessed through various devices, including mobile media, has been a major factor in the dwindling in popularity of more traditional music TV channels like MTV, which still operates a number of country‐specific networks. The global number of households receiving MTV has declined markedly since 2012.⁴

A little more than half (about 55%) of on‐demand streaming takes the form of video streaming. Video streaming has been dominated by US‐based YouTube, a Google product, with about 85% of users accessing music through the site. The remaining 45% of on‐demand streaming is divided about equally between paid and free audio.⁵

During 2017, music streaming revenue rose by over 41% and has become the industry's largest single revenue source. The digital share of global revenue rose by 54%. This means, of course, that the majority of music revenues are digital‐based. At the same time, revenue from sales of physical copies decreased by nearly 5.5%, while revenue from downloads was down by 20.5%.⁶

This last was, of course, attributed to growth in streaming services. Even so, growth in digital music media is being viewed as part of a gradual recovery for the industry. Revenue still stands far below figures prior to the switch to digital, but this is expected to change.

Music streaming is an odd business. Although services have acquired hundreds of millions of users, profit is often another matter. Spotify, for example, boasted 159 million monthly active users (MAU) in 2017, yet a net loss of $1.4 billion.⁷

Another confusing factor is that numbers of users for specific music streaming services, as reported, can vary tremendously, even for the same service. This is because of wide disparity in the methods by which numbers are reported. Some figures note all subscribers, while other data relies on MAU figures. MAU figures can be lower than simply the numbers of subscribers.

In Table 9.1, music synchronization, or sync, refers to the licensing of copyrighted music to accompany visual media, such as TV programs and ads, video games, and the like. The chart below, which lists the world's top 15 music streaming services, is based on a number of sources. As this is being written, YouTube is just beginning its stand‐alone music‐streaming service. By contrast, its placement in the chart is based on its global popularity as a means of accessing music through streaming of music videos.

Music Streaming Services

The world's mix of available music‐streaming services is a volatile area, with frequent change. In addition to the streaming services which appear in Table 9.2, a number of other platforms enjoy wide popularity and may increase their market share over time. These include such widely divergent services as Anghami, which is a service aimed at the Middle East and North Africa, and Joox, a service offered by China‐based Tencent throughout much of Asia.

Anghami, which was formed in 2012 in Lebanon, focuses on Arabic‐language and international music for a Middle Eastern audience. Anghami entered into a music licensing deal with Warner Music Group in 2017. Joox has been phenomenally popular in such markets as Thailand, Myanmar, Indonesia, Malaysia, and Hong Kong. Compared to such Western services as Spotify or Apple Music, Joox offers more Asian artists, including those associated with the popular K‐pop genre from South Korea.⁸

Traditional Radio

Traditional over‐the‐air broadcast radio is often termed terrestrial radio in the US, in contradistinction to satellite radio. Formerly seen as enemies, a symbiotic relationship between traditional over‐the‐air broadcast radio and streaming has been developing to a degree, in that artists who enter the public consciousness via streaming may then find increased exposure via traditional over‐the‐air radio.

Traditional broadcast radio remains vibrant, but is not experiencing the growth potential associated with music streaming. In addition, some use of traditional radio has shifted to apps, such as iHeartRadio's app or such station aggregator apps like TuneIn. TuneIn provides access to a number of stations globally, representing various genres. Other apps perform similar or more specialized tasks, such as allowing users to listen to various stations from one particular country. Such apps are, of course, used on the same devices which can also be used for subscription streaming services.

For some years now, various US‐based studies and reports have suggested that traditional radio has failed to connect with younger listeners.²⁶ At the same time, increasing numbers of new cars connect to digital services. In addition, smart in‐home speaker systems like Apple HomePod and Amazon Echo allow for a variety of digital web‐based music services while bypassing local radio stations, unless those stations also offer a web‐based option.

At one time, the future of radio was assumed to be represented by local, traditional over‐the‐air radio involving a digital signal, using IBOC (in‐band on‐channel) systems in the US, or DAB (digital audio broadcasting) throughout much of the rest of the world. IBOC is often marketed as HD radio. Some parts of the world use DRM, or Digital Radio Mondiale, which can also be used for international shortwave radio. These options developed before the advent of streaming and prior to the emergence of options for web access in cars, however.

Europe had been pushing for greater utilization of DAB, but European broadcasters were largely resistant. As in‐car streaming access options improve, web‐based alternatives to traditional radio are increasingly viewed as a more likely future in‐car experience than either IBOC or DAB.

As expressed by Tony Prince, a former DJ with Radio Luxembourg who more recently began a web‐based music service, “At this time we have no interest in FM or DAB and are convinced that the moment the Internet streamed into the car radio, radio once again faces an enormous game‐changer.”²⁷

Streaming music platforms and podcasts in the car have the advantage that, like many web‐based video options, programming is not linear. In other words, listeners do not have to follow a station's schedule. They are not limited to what a radio station wants them to hear, when the station wants them to hear it. Instead, no linear schedule is followed, and listeners can more or less create their own schedule.

Where listening to traditional broadcast radio or even CDs persists in the car, this often appears to be simply a matter of a lack of familiarity with other options, a situation which can be expected to change over time. Satellite radio is, essentially, a US phenomenon. Satellite radio may or may not remain attractive to US drivers as in‐car web options improve. In Alaska and Hawaii, US‐based SiriusXM satellite radio is only available through its streaming service.

Bob Sherman, called the BBC's most senior music executive, said in 2018 that just like BBC television services were under siege by web‐based competitors like Amazon and Netflix, BBC radio faces stiff competition from streaming services. Sherman noted that this new competition was not only coming from a new and different form of media, but that this competition was, in some instances, coming from other parts of the globe:

Like so many industries, broadcasting is adapting to the impact of the Internet. Whereas in years gone by, my predecessors would today be eyeballing their competition across the UK radio sector, our competition isn't even based on this island. The new competition set is global.²⁸

The BBC has been attempting to compete with the likes of Spotify and Apple Music, as well as Netflix and Amazon Prime, with its own BBC iPlayer service for both video and audio. Unlike its competition, however, iPlayer is tied to the mandatory BBC television license fee in the UK, which makes viewing without a license illegal. Attempts to provide a global iPlayer service broke down largely because of complications involving the US market, where cable suppliers threatened to drop the BBC's lucrative BBC America channel in response to iPlayer expansion.

Music Labels

Throughout all of the 20th century, record labels, also known as music labels or record companies, played a major role in the recording, promotion, and sale of recorded music. Despite the fact that records per se are, for the most part, a legacy medium, the terms “record label” and “record company” persist. During the 1990s, the industry was dominated by what were known as the “Big Six” music labels: Warner Music Group, EMI, Sony Music, BMG, Universal Music Group, and PolyGram.

After mergers, sales, and joint ventures, these were whittled down to become, by the 2010s, the “Big Three”: Universal Music Group, Sony Music Entertainment, and Warner Music Group. Their parent companies are discussed in other chapters. These three labels, which are commonly referred to as the only major global music labels left on the planet, were believed to account for as much as 80% of the global music market by the late 2010s.

Technically, as used in this sense, the term “label” is a bit of a misnomer, since one of these companies might operate a number of specific labels, sometimes called imprints. Universal Music Group, for example, owns various specific labels, including Capitol, Deutsche Grammophon, EMI, and Virgin, among others. Both terms “label” and “imprint” are, of course, derived from an earlier era, when all music sales involved physical copies.

As a result of the transition to web‐based media, an increasing number of recording artists are bypassing these labels, taking advantage of direct Internet sales as well as promotion through online videos. In addition, indie (independent) labels play an important role in more or less opposition to the major labels. Interestingly, all three major recording companies, Universal, Sony, and Warner, own stock in Spotify.

Once revenues from recorded music began to plummet as the result of the switch to digital, this prompted the appearance of so‐called 360 deals in some cases. These are business relationships between artists and labels which provide income to an artist from more sources than under a traditional contract, as well as support in such areas as marketing, promotion, and tours. They are termed 360 deals, based on the concept of 360 degrees, because they hypothetically bring in finances and support pertaining to more aspects of the industry than with a traditional recording contract.

At the same time, music labels continue to be, “by far, the largest investors in artists' careers” on a global basis. Each year, they spend about $4.5 billion globally on artists and repertoire (A&R) and marketing, which constitutes 26% of music industry revenue.²⁹

As of 2017, Universal Music led in music label revenues, followed by Sony Music and then Warner Music. Nearly the same percentage of global music revenues enjoyed by Universal Music, however, was achieved by independents.³⁰ As already noted, some artists bypass the labels entirely, opting for online publicity and distribution through such platforms as YouTube and social media.

Facebook entered into deals with Universal Music Group, Sony/ATV Music Publishing, and Warner Music Group in 2018. These agreements allow videos and music using content from Universal and Sony artists to be posted on Facebook, with royalties going to songwriters.³¹

Music and Culture

The “Big Three” have enjoyed an extensive geographic reach. In spite of this fact, when the industry was dominated by physical sales (CDs and, in an earlier era, tapes or records), distribution and promotion in far‐flung parts of the world were handled by companies in specific world regions which were more attuned to local preferences and culture.

Still, the global music industry was characterized by a high degree of homogenized global popularity of major artists. This appears to be changing, to at least some extent. The switch to web‐based media appears to be bringing about changes which pull in two different directions at once.

First, the ease and potentially low cost of digital music creation and distribution has meant that we have seen increased worldwide exposure for musical talent originating outside of core nations, especially outside of the US and Western Europe. Secondly, this has also meant that it has become easier for specific nations to produce and distribute more of their own talent output, without depending on elite media centers in places like the US or the UK.

The latter factor, along with changes in Japanese radio broadcasting, are said to have resulted in an increased disinterest in foreign music among Japanese audiences. The market for music in Japan is now said to be characterized by sales which are about 90% domestic and only 10% international. Some artists from outside Japan, such as Bruno Mars and Carly Rae Jepsen, are said to be popular in Japan only because they have made the promotional effort to invade Japanese television.³⁴ This is a radical shift from the media relationship between the US and Japan in previous decades.

In other parts of the world which formerly lacked their own independent record labels, development of new labels has meant greater distribution of regional or localized musical talent. This has been the case in Hong Kong, for example.

New localized labels may have investment from the “Big Three” or from other major media entities. The Liquid State label, for example, was created in 2018 in Hong Kong by Sony Music and China‐based Tencent. An interesting aspect is that Spotify owns 10% of Tencent.

In Asia generally, streaming has caught on faster than in the United States. There, significant inroads have been made by new Asian‐based streaming services, which are set to supply a greater proportion of regional talent. Advantages of such regional‐based music streaming services, from the consumer perspective, include more culturally relevant editorial teams, as well as more regionally attuned interfaces.³⁵

Universal Music Group (UMG) made news in 2018 by opening a division in Nigeria. The aim was to sign more African talent, not only from Nigeria but from other parts of the continent, especially neighboring Ghana. This was said to reflect the growing visibility of music from those two countries in the global music industry.³⁶ At the same time, the African market was said to be plagued by several challenges, including piracy, inadequate legal structures, and distribution issues.³⁷

Major Music Organizations

Some of the most significant music‐related organizations from a global media perspective are directly concerned with music copyright. These include WIPO, the World Intellectual Property Organization, as well as various organizations involved in the collection and distribution of music royalty payments.

Copyright and royalties are a vital part of the global music industry. Over $9 billion in music royalties were collected in 2015 alone by CISAC (Confédération Internationale des Sociétés d'Auteurs et Compositeurs, or the International Confederation of Societies of Authors and Composers). Global revenues from music copyright amounted to over $24 billion in 2015.³⁸

This includes mechanical licenses, which provide the right to use and distribute music through, for example, ringtones, CDs, and digital downloads, as well as synchronization licenses. Synchronization licenses allow for the use of copyrighted music in videos.

Music copyright is tied to at least two major global media issues, in particular. One, of course, is piracy. Out of all global Internet users in 2017, it is said that 40% of males and 30% of females accessed music through copyright infringement.³⁹

Another issue is what the IFPI terms the “value gap” between the value which services like YouTube “extract” from copyrighted music, on the one hand, and what is returned to the music creators and investors in terms of revenue on the other.⁴⁰ As discussed earlier in this chapter, YouTube has developed into the largest global entity for listening to music on a streaming basis. When artists' videos are streamed, royalties are paid to artists and rights holders, usually labels, as long as advertising is involved. This is based on Content ID technology which creates a digital identification for each individual video.

The system of music copyright provides the foundational framework necessary for the collection of music royalties. This is handled by what are termed performance rights organizations (PROs). In some parts of the world, PROs are known by such names as copyright collection societies, copyright collectives, or copyright collecting agencies. Three of the most significant PROs are American‐based ASCAP, BMI, and SESAC.

Other organizations or services focus on more general aspects of the global music industry. The IFPI, for instance, represents the global music industry and is currently pushing for what it considers greater equity in payments for online use. Nielsen Music is a commercial service concerned with audience measurement where music is concerned.

Conclusions

In general terms, over the last few years global media services and options have been characterized by tremendous upheaval as a result of the transition to web‐based digital forms. Perhaps in no general area of world media is this more apparent than with regard to the music industry.

Physical sales of recorded music began in the 1880s with cylinder‐based records, quickly followed by various disc‐based forms which predominated until late in the 20th century. The appearance of radio broadcasting in the 1920s was first perceived as a potential threat to the recording industry. That was before the two media forms, radio and recorded music, assumed a symbiotic relationship by the 1940s in which radio was perceived as boosting record sales.

In a similar manner, the availability of recorded music in the form of digital files by the 1990s was first viewed by the recording industry as a threat. By the late 2010s, however, the recording industry and web‐based streaming services have begun to settle into a relationship which is seen as beneficial to both.

This development has given rise to a dominant role played by streaming music platforms, a form of media which is a relatively recent innovation. Streaming has been rapidly supplanting music downloads, including both piracy and legal sales, to become the dominant method for accessing music aside from traditional radio. Even where traditional radio still holds strong, growth rates favor streaming as, apparently, the eventual favorite.

Traditionally, the world music industry had been largely dominated by the popularity of artists from core nations, particularly the United States, but this appears to be gradually changing to varying extents. In an earlier era, the US‐based MTV network, originally focused on music videos, expanded into a number of countries, but found it imperative to adopt a “think globally, act locally” approach. In practice, this meant that non‐US versions of MTV needed to emphasize local music and local culture. Since then, in some parts of the world, new video options have arisen which are even more in tune with local culture and local preferences than MTV.

Even more recently, various new web‐based music options have arisen around the globe which are highly regionalized in both content and approach. These services are not necessarily dependent on music from core nations. Instead, new web‐based technological options make it just as easy to showcase regional talent from developing countries as to feature top US artists. At the same time, the proliferation and low cost of new web‐based technological options are facilitating the development of music‐recording industries in places like Nigeria and Ghana. The cultural ramifications are yet to be seen, but the potential is enormous.

In addition, the significance of Asia in particular in the global music industry has been increasing, simply due to the sheer numbers of individuals involved. The emergence of such streaming services as QQ Music in China and Gaana in India provide clear evidence of the vibrant nature and growth potential for the global music industry outside of what are currently considered core nations. Hollywood talent and US‐based record labels will continue to dominate to a considerable degree, but the world music industry is volatile and is clearly in the process of being redefined.