German music industry records highest revenues in 20 Years
The music industry in Germany has recently hit a milestone, generating a total revenue of €2.07 billion in 2022. This marks the first time in 20 years that the industry has surpassed the €2 billion mark, last achieved in 2002 (€2.21 billion). This positive development comes with a growth rate of 6.1% compared to the previous year, indicating a continuous trend in the growth of the industry.
Digital sales dominate the market
One of the significant shifts in the music industry over the past two decades is the transformation of sales channels. Unlike 20 years ago, the majority of revenue (80.3%) now comes from online sales, while physical sales make up 19.7%. Audio streaming is now the strongest market segment, with a 73.3% share of the entire industry's revenue and a significant growth of 14.0%.
CDs and vinyl LPs remain relevant
Despite the growth of digital sales, traditional physical formats such as CDs and vinyl LPs still hold a significant market share. Despite a decrease of 17.1%, CDs remain the second most important revenue source, with a market share of 12.9%. Vinyl is in third place with a revenue share of 6%, showing a smaller growth of 5.1% compared to the previous year's 20.1%.
Digital market continues to grow
Overall, the digital market grew by 11.7% in 2022, while the physical market declined by 11.9%. This trend indicates that the music industry in Germany is adapting to changing consumer preferences and embracing new technologies.
What's next for the music Industry in Germany?
The growth of 6.1% in the industry for the fourth consecutive year is a positive development. It is especially significant that the industry has surpassed the €2 billion mark again after two decades. However, the increase in prices for the first providers of streaming services will be interesting to observe and see how it will affect the wider market. Additionally, it will be interesting to see how short-form videos will be monetized even more. The Kulturpass initiative, which offers a 200 euro credit to young adults turning 18 in 2023 and can be used on a digital platform for two years, could provide a substantial boost to both the industry and vinyl enthusiasts, as vinyl continues to appeal to younger generations as a desirable form of music content.
Last year, we also looked at the development of streaming and download figures in Germany. Check it out here.