The music industry: the 5th largest market worldwide

The music industry: the 5th largest market worldwide


As music lovers, we know about its power to connect us, cheer us up, make us dance and even cry like no other form of art does. Beyond entertainment, it is part of our culture and an engine of economic growth. According to the latest report from Entrepreneur magazine, the music industry contributes $170 billion to annual GDP and supports 2.5 million jobs just in the United States.

While the industry has undergone a radical transformation over the past 15 years with the proliferation of distribution and streaming media, as the sector continues to expand and evolve, so do the opportunities to enter fully and make huge returns, driven by the power of discovery.

At BBVA New Gen we have tracked the performance of major labels, publishers, suppliers and services around the world to create a holistic view of how the business is evolving in terms of music creation, experiences, royalties, streaming and live distribution. How will the industry develop in the coming years? Let’s dwell on a few aspects here.

Blockchain, Web3 and the metaverse

First of all, the potential use cases of Blockchain, Web3 and the metaverse: transferring control from centralized entities to builders and users can also act as a democratizing leverage on content consumption.  Indeed, we have already witnessed the beginnings of something bigger: and its latest deal with Fantagio, MTV creating a virtual space on Roblox as part of a new awards category, or Muse’s new album, Will of the People , to be released as a playlist-eligible NFT

The number of context-based music services (TjDj, Smule, TikTok) keeps growing in parallel to access-based services (Spotify, YouTube, iTune), and quite often these platforms already offer access and, at the same time, a whole bunch of features that allow the user to do things with the music. 


Of course, when it comes to accessibility, it is unavoidable to discuss intellectual property. In the stock market, vehicles such as Hipgnosis Songs, Fund Royalty Exchange and Songvest, allow investors to obtain a share of royalty payments every time a song is broadcast, performed or played in a spot or a film, and even bargain for IP rights auctioned by artists, independent labels and publishers.

One of the reasons why the music industry is so attractive is that its performance has low correlation with other financial values. To illustrate, even during the height of the pandemic, when live performances were largely disrupted and global markets were volatile, people continued to listen to music.

Distribution and software services

If distribution and software services continue to grow in importance, music companies will have to add yet another competitor to their existing ones, and perhaps new business areas as well, in order to capture the growing value created by context-based music services.


Music media revenue by segment (2020 – 2022)

Music media industry grew strongly even  in a slowing global economy, with live in particular benefiting from its continued bounce back.

Source: MiDiA Research