IFPI's Global Music Report 2025 | A Deep Dive Into Industry Trends 📊
Streaming, AI, and the Shifting Landscape of Music
The International Federation of the Phonographic Industry (IFPI) has released its Global Music Report 2025, offering a comprehensive analysis of how the recorded music industry performed in 2024. While the report shows continued growth, there are concerning signs of deceleration and emerging challenges, particularly related to AI and the landscape for independent artists.
Growth Continues for a Decade Straight
The global recorded music industry has achieved its tenth consecutive year of growth, with total trade revenues reaching $29.6 billion in 2024, representing a 4.8% year-on-year increase. This milestone is significant for an industry that had previously faced years of decline due to piracy.
However, this growth rate marks a substantial slowdown compared to previous years:
2023: 10.2% growth
2022: 9.0% growth
2021: 18.5% growth
In absolute terms, the global market added just $1.4 billion in 2024, with 2024's growth rate being the lowest since 2015. This deceleration signals potential challenges ahead for the industry.
Streaming Continues to Power the Industry
Streaming remains the primary engine driving the music industry's growth:
Subscription streaming growth of 9.5% (down from 11.2% in 2023)
Paid subscription services driving the majority of revenue increases
Physical format revenues declined by 3.1% to $4.8 billion, though Vinyl continues to grow at 4.6%
Regional Performance Highlights Shifting Dynamics
The report reveals significant variation in growth across different regions:
Middle East & North Africa (MENA): +22.8% (fastest growing region)
Sub-Saharan Africa: +22.6%
Latin America: +22.5%
Europe: +8.3%
United States: Just +2.2% (well below the global average)
A notable shift occurred in the top 10 global markets, with Australia falling out for the first time in nearly 30 years, replaced by Mexico.
The Imminent Dangers of Gen AI in Music
Perhaps the most alarming development facing the industry is the rapid advancement of generative AI. Recent economic studies paint a troubling picture of AI's impact on human musicians:
Financial Threat to Artists:
By 2028, approximately 23% of music creators' revenues will be at risk due to generative AI
Music creators could lose up to €10 billion over the next five years, with expected annual losses of €4 billion by 2028
As human creators lose income, tech companies developing AI music tools stand to gain, with the market for non-human authored music projected to reach €16 billion annually by 2028
Cultural Appropriation Concerns:
89% of Aboriginal and Torres Strait Island music creators believe AI will lead to an increase in cultural appropriation
Generative AI threatens cultural heritage by replicating and commodifying culturally specific music styles without understanding their historical or social significance
Traditional folk music from under-represented communities risks being synthesized into generic AI-generated tracks, stripping them of context and value
Lack of Protection and Consent:
AI tools are being trained on works created by humans almost entirely without their consent
Most current models use copyrighted works in their training without authorization
There's a fundamental gap in licensing frameworks with current systems like blanket or fractional licensing aren't built for the complexity of AI
No remuneration system exists that closes the AI-generated financial gap for music creators
Industry sentiment reflects these concerns, with 82% of music creators worried that AI could prevent them from making a living from their work, and 65% believing the risks of AI outweigh its potential opportunities.
The Depreciating Market Opportunity for Independent Musicians
While technology has theoretically “democratised music distribution”, the reality for independent artists in 2025 is increasingly challenging:
Market Oversaturation:
With millions of new tracks uploaded to streaming platforms daily, getting noticed is harder than ever
Independent artists now compete not just with other musicians but also with AI-generated songs that can be created instantly
The pressure to stand out in an overcrowded industry requires significant marketing expertise and resources that many independents lack
Financial Challenges:
Streaming services still pay artists only fractions of a cent per stream, making sustainable income difficult without millions of plays
Rising costs of touring, traditionally a vital income source, are making it harder for independent artists to perform profitably
Independent artists must handle branding, advertising, and PR themselves, often with minimal budget and reach compared to label-backed artists
Algorithmic Dependency:
Social media and streaming algorithms dictate music discovery, forcing artists to adapt their content to fit algorithmic trends
Major playlists that can make or break a song's success are still largely controlled by labels, creating significant barriers for independents
The constant pressure to create content for social media platforms takes a toll on creativity and mental health
Industry Structure Issues:
Despite the failures of the traditional label system, the alternative path for independents is fraught with challenges
Artists are expected to be not just musicians but full-time content creators, leading to burnout and creative compromises
Understanding royalties, publishing, and copyrights remains complex, with many indie artists lacking the knowledge or resources to properly manage their rights
Looking Forward | Navigating Uncertain Waters
The IFPI report reveals an industry at a crossroads. While a decade of growth is certainly worth celebrating (for some), the significant slowdown in the growth rate raises questions about future expansion. The mature markets, particularly the US, are showing signs of saturation, while emerging markets represent exciting but still relatively small opportunities.
For artists, the dual threats of slowing industry growth and the rise of AI create a challenging landscape that will require new strategies and approaches. Independent artists in particular will need to find innovative ways to connect with audiences and monetize their work as traditional pathways become increasingly crowded.
As we move further into 2025, the music industry will need to address these challenges head-on, particularly by developing appropriate frameworks for AI regulation and finding new ways to sustain artist careers in an increasingly competitive environment.
🤔 What do you think about these developments? Are you concerned about AI's impact on the music industry? How might independent artists navigate these challenges?
💬 Share your thoughts in the comments below.
🤝🏼 Join us at Vinyl Culture as we continue exploring ways to preserve and evolve an authentic Music Culture in an age dominated by algorithms and corporate interests.
Together, we can make a difference. 🙌🏻
