For music labels, the good news keeps piling up at a rate that seemed unimaginable just a few years ago. Quarter after quarter, big labels are reporting sizable jumps in revenue after over a decade of decline. Yesterday, Sony’s recorded music division reported that its Q2 revenue jumped 21.6% over last year, to nearly $1 billion. Meanwhile, its operating income nearly doubled.
The positive trend lines are consistent with what has been reported by the other major labels over the last several months: It may not be what it was in the heyday of the compact disc, but the music industry is growing again. The culprit? Music subscription services like Spotify and Apple are growing in popularity, contributing a bigger and bigger chunk of monthly revenue to the bottom lines of music labels. In Sony’s case, revenue from streaming has climbed 68% year over year.
With Spotify, Apple, and Amazon all seeing steady growth in subscribers (and Pandora, Tidal, and Deezer all taking their best shot at the subscription market as well), don’t expect the cheery headlines to let up anytime soon, at least as far as the labels are concerned. Indeed, Goldman Sachs predicts that the music industry will balloon to $41 billion in value by 2030, driven primarily by–what else?–streaming. That’s a promising outlook, but how all that value gets divvied up between labels, tech companies, and creators is another story.JPT