Despite massive disruption and upheaval over nearly two decades, the recorded music industry remains highly concentrated at the top. According to data released by independent label group WIN, an astounding 62.4 percent of all music sold, downloaded, and streamed worldwide comes from just three major labels, in 2016. In the United States, that figure is 64%, and a lopsided 77% in the UK.
The three major labels — Sony Music Entertainment, Warner Music Group, and Universal Music Group — are currently enjoying a surge in streaming revenues from companies like Spotify and Apple Music. Spotify and other streaming services, in turn, are paying the greatest percentage of their royalties to the majors. According to some estimates, the ‘Big Three’ command more than 80% of streaming royalties from Spotify, Tidal, Apple Music, and others.
The breakdown shows extreme variations in the marketshare across different countries. Market concentration in markets like Finland, Spain, and Denmark, for example, are extreme, with the three major labels accounting for greater than 80% of all sales. That pendulum swings wildly in Japan and South Korea, where independent labels and companies enjoy far greater marketshare and control of both J-pop and K-pop markets. In South Korea, the three major labels control just 12% of recorded music sales, streams, and downloads, according to the data.
The breakdowns, calculated in May of this year, demonstrate the surprisingly strong staying power of the majors, a group widely expected to be extinct after the advent of Napster, file-sharing, iTunes downloading, and most recently, torrenting and streaming. Recording sales have indeed dropped precipitously over the past 15 years, though majors have retained a strong grip on shrinking market.
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