WELCOMEIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYWelcomeime and time again,throughout my career, I havebeen privileged to witnessmusic’s power to bring us together.Language and culture may vary, butmusic transcends borders and unites us.This year’s Global Music Reportexplores how music has become trulyglobal – more so than ever before.Through the work and dedication ofartists, record companies and theirpartners, music from vibrant anddiverse regions is being sought outand loved by fans in every corner ofthe world.The increasingly connected globalmusic landscape is enabling us toexplore new genres, sounds and artists,no matter where they originate, and forartists to enjoy the opportunities thatI have had to engage with audiencesaround the world.As this journey continues, we mustensure the right environment is createdto make this success sustainable forthe future; we must continue to workto establish a music ecosystem that ishealthy and open to all, where music isvalued and respected.This is an excitingtime of growth forthe music industryand we’ve increasedour investmentin talent and thecreative process.We’re partneringwith our artists tocontinue advancinginnovative and uniqueopportunities toconnect with audiencesin more corners of theworld than ever before.We are succeedingbecause – even astraditional ways ofdoing business arebeing upended – we’veworked to anticipatemusic’s creative andcommercial evolutionand continued investingin our artists, drivinginnovation and activelyshaping our future bycontinuing to transformourselves.In an attentioneconomy, even themost original andcompelling talentneeds amplification tocut through the noise.We have the creativeexpertise, globalimpact, and culturalinfluence to makesure our artists aren’tjust heard, but thatfans all over the worldgenuinely engage,react and care.ROB STRINGERCEO, Sony MusicEntertainmentSIR LUCIAN GRAINGEChairman & ChiefExecutive Officer,Universal Music GroupMAX LOUSADACEO of Recorded Music,Warner Music GroupTPLÁCIDO DOMINGOCHAIRMAN, IFPI3

NIELSEN MUSIC CONNECTTHE INDUSTRY’S PREMIER MUSIC PERFORMANCEMEASUREMENT PLATFORMGain access to the industry-leading global data analysis platform that deliversa comprehensive view of music streaming and sales for artists and songsin a single Web-based tool.To learn more, contact [email protected] 2019 The Nielsen Company (US), LLC. All Rights Reserved.

IFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYContentsState of the Industry6Global Music Market 2018 in Numbers7Introduction - Frances Moore8Global Charts12Global Market Overview152018 Figures by Format162018 Figures by Region18The Dynamic Nature of High-Potential Markets24The Global Story of Local Genres26Case Study: Aya Nakamura27Case Study: George Ezra29Case Study: J Balvin30The Value of a Label36Fostering Fair Marketplaces so Music Continues to [email protected] orgDesigned by Data Design IFPI 2019All data, copy and images are subject to copyright and may not bereproduced, transmitted or made available without permission from IFPICONTENTS5

6GLOBAL MUSIC MARKET 2018 IN NUMBERSIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYGlobal MusicMarket 2018in Numbers 9.7% 32.9%Global revenuegrowthGrowth inpaid streamingrevenues 34.0%Growth inoverall %Physicalrevenuedecline46.9%Streamingshare of globalrevenues

IFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYINTRODUCTIONIntroductionMusic becomes truly globalusic has truly become global –in ways never before imagined.From the South Korean boyband, BTS, capturing the hearts of fansfrom Seoul to Rio, to the Colombianreggaeton singer, J Balvin, taking his placeamongst the global pop elite, to emergingstars like Mali-born French artist, AyaNakamura, showing language is no barrierto reaching beyond home borders. Theglobal music community has never beenmore connected, and fans and artists alikeare seizing the opportunities of this newera to enjoy and share the music they love,no matter where it comes from.We have now seen four consecutiveyears of growth, driven by great musicfrom incredible artists in partnershipwith talented, passionate people in recordcompanies around the world who helpthem realise their creative and commercialpotential. Today, this partnership takesmany forms, with artists drawing on theextensive expertise and resources recordcompanies provide. Ultimately, it is forgedon the simple premise of a shared love ofmusic and mutual respect.One of the most exciting aspects ofthis global growth is the regions drivingit. For the fourth year in a row, LatinAmerica has seen the largest regionalgrowth, with countries like Brazil leadingthe way. Asia has become a world player,with markets like China and SouthMKorea fuelling growth. The Middle Eastand North Africa are now commandingattention. Crucially, these territories,and the artists emerging from them,are already reaping real benefit. Recordcompany investment, local partnershipsand increasing availability of mobile datahave given rise to a rich and diverse globallandscape with fans in each territoryaccessing music through a unique andevolving combination of formats andservices. As this continues, revenue isreturned to the artists, the cultures andthe communities to spark the next cycleof creative endeavour.Record companies continue to honetheir partnerships with artists, offeringexpertise and resources on the groundto help navigate these landscapes andbring their music to their fans in the mosteffective and affecting ways.There is still much to be achieved toensure that these positive developmentscontinue at pace. We are campaigning formusic to be fairly valued in all its forms.We are working for music copyright tobe recognised and respected aroundthe world, and we remain committed toestablishing a level playing field when itcomes to negotiating a fair deal for thosewho create music. Above all, we areworking to ensure that music continueson its exciting, global journey.FRANCES MOORECHIEF EXECUTIVE, IFPI7

8GLOBAL CHARTSIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYGlobalChartsThe most popular artistsand best sellers of 2018

GLOBAL CHARTSIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYTop 10 Global Recording Artists01020304050607080910DrakeEd SheeranEminemImagineDragonsLady GagaBTSPost MaloneQueenArianaGrandeBruno Mars9

GLOBAL CHARTSIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYGlobal Top 10 Global Top 10Digital Singles Albumsof 2018of 2018Artist & TitleGlobal convertedsingle units (m)01Camila Cabello(feat. Young Thug)19.0Drake15.3God's Plan03Ed Sheeran14.9Shape of You04Ed Sheeran13.5Perfect11.90611.8Despacito07Tia Ray10.9Be Apart10.0099.610PsychoBTSLove Yourself 結 'Answer'03BTSLove Yourself 轉 'Tear'04Lady Gaga2.72.31.905Johnny Hallyday1.706Ed Sheeran st Malone(feat. Ty Dolla ign)02Beautiful TraumaSomething Just Like ThisMarshmello& Anne-Marie3.5Bohemian Rhapsody08The Chainsmokers& ColdplayCast of 'The Greatest Showman'Mon Pays C'est L'amourGirls Like YouLuis Fonsi(feat. Daddy Yankee)01A Star Is Born (OST)05Maroon 5(feat. Cardi B)Global convertedsingle units (m)The Greatest Showman (OST)Havana02Artist & Title109.2Cast of 'Mamma Mia!Here We Go Again'Mamma Mia! Here We Go Again (OST)0.911

12GLOBAL MARKET OVERVIEWIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYGlobalMarketOverviewDynamic, diverse marketsdrive global growthIn 2018, the global recorded music market grewby 9.7%. It is the fourth consecutive year of globalgrowth and the highest rate of growth since IFPIbegan tracking the market in 1997.Ariana Grande photo by Dave MeyersThis growth was predominantly driven by a 32.9%rise in paid streaming, that now accounts for 37.0%of total revenue.Fuelled by the continued investment fromrecord companies, the global story is one ofdynamic, diverse markets evolving rapidly andfinding routes to growth. Within the top 10, someof the fastest growing markets are in Asia and LatinAmerica (South Korea, Brazil) with Asia becomingthe second largest region for physical and digitalmusic combined for the first time.Artists from these evolving markets are alsoseizing the opportunities to break out to a globalaudience. Working in partnership with recordcompanies and supported by their resources andunderstanding of the different music landscapes,artists are enjoying global success. As they andtheir music resonate with fans in different parts ofthe globe, revenue is returned to help fuel the nextcreative cycle.As these high-potential markets continue todevelop and seize these opportunities, it is crucialthat the right foundations are in place to supporttheir sustainable, long-term development. Musiccopyright must be recognised and respected, andthe music being enjoyed in its increasingly variedformats must be valued fairly.

GLOBAL MARKET OVERVIEWIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRY250.60.7Global RecordedMusicIndustryRevenues 2001-2018 (US .3200121.721.7200220.020.020031.019.4Total revenue US billions 23.9Physical0.41.00.12004200522.420.820.8Digital (excluding streaming)1.016.418. revenue22.420.820.8 US billions ther digital12% 14%Downloads .014.814.314.816.217.419.10.4Performance isation revenuesTop Ten Music Markets 201825%2%Physical25%37%global recorded musicmarket growth0. 9.7% Recorded MusicRevenues by Segment ionaudio streamsUSASouth th %Francedigital music shareof global revenue255mBrazilusers of paidsubscription accountsBTS photo courtesy of Big Hit Entertainment13

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2018 FIGURES BY FORMATIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRY2018 Figuresby FormatGlobal recorded music revenues totalledUS 19.1 billion in 2018, a 9.7% increase on2017 and a faster rate of growth than theprevious year ( 7.4%)DigitalrevenuePhysicalrevenue 21.1% 10.1%Overall digital revenues grew by 21.1% to US 11.2billion in 2018, crossing the US 10 billion mark forthe first time ever and now accounting for 58.9% oftotal recorded music revenues. Within this format,the picture was varied with streaming pushinggrowth up strongly (increasing by 34.0% to US 8.9billion), while downloads saw a decline of 21.2%,dropping to 7.7% of the total market.Paid audio streaming in particular was againa key driver ( 32.9%), with almost all marketsreporting growth in this area. Digital now makes upmore than 50% of revenue in 38 markets.Physical format revenue saw continued declinein 2018, dropping by 10.1% and now accountingfor around a quarter of the total market (24.7%).As in the previous year, the majority of marketssaw a decrease in physical format revenues, but asmall number of markets bucked the trend, postinggrowth (India 21.2%; Japan 2.3%; South Korea 28.8%), and physical revenues still constitutea significant percentage of the market in somecountries (representing 71%, 47% and 35% of themarket in Japan, Poland and Germany respectively).Revenues from vinyl also sustained their upwardtrajectory, posting growth for the thirteenthconsecutive year, growing 6.0% and maintaining a3.6% share of the overall market.Performancerights revenue 9.8%Revenues from performance rights – use of recordedmusic by broadcasters and public venues – climbedin 2018, seeing an increase of 9.8%. Totalling US 2.7billion, performance rights revenue represents14.0% of total recorded music industry revenues.Synchronisationrevenue 5.2%Synchronisation – the revenue from the use of musicin advertising, film, games and TV – posted growthof 5.2%, a more modest rate than the previous year(14.6%) but maintaining a 2.3% share of the totalmusic market.15

162018 FIGURES BY REGIONIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRY2018 Figuresby Region 11.7%Asia andAustralasia2018 saw Asia and Australasia move up to becomethe second largest global region for physical anddigital revenue combined, posting growth of 11.7%.There was strong growth in digital ( 26.8%), drivenby paid audio streaming ( 29.5%), which offset acontinued decline in downloads (-7.1%). China, anew entrant in the global top 10 the previous year,rose to seventh position in 2018. The region’s largestmarket, Japan, also saw growth (3.4%) following adecline of 2.9% the previous year. This was drivenby gains in streaming ( 32.6%) coupled with areturn to growth in physical revenues ( 2.3%).South Korea ( 17.9%) and Australia ( 11.0%) alsorecorded notable growth. 16.8%Latin AmericaLatin America grew by 16.8%, once again thehighest rate of growth globally. The region reflectedglobal trends with declines in physical revenue(-37.8%) and downloads (-45.0%), but strongresults in streaming ( 39.3%). Brazil, the largestmarket in Latin America, continued its upwardtrajectory, increasing by 15.4% and recording oneof the highest rates of growth in digital in the top 10markets (38.5%). Chile, Mexico and Colombia alsosaw notable gains, increasing by 16.3%, 14.7% and9.0% respectively.

2018 FIGURES BY REGIONIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYStreaming revenues, particularly frompaid subscriptions, continued to grow in2018, with all regions posting growth inthis area. Overall, growth trends weremore diverse across different markets 0.1%EuropeEurope posted modest growth ( 0.1%) in 2018,with a varied picture for countries across theregion. There was growth in some of the Nordicmarkets, with Sweden and Norway growing 2.8%and 1.7% respectively, and strong growth in marketssuch as Austria ( 20.0%) and Ireland ( 7.5%).Germany was the only top 10 European market tosee a decline in revenues (-9.9%), partly due toits continued transition away from a physical-ledmarket, and was overtaken by the UK ( 3.1%) as thelargest market in the region.Overall, paid streaming in Europe rose by29.2%, whilst physical revenues fell by 19.4% anddownloads by 24.3%. Performance rights revenuefor the region dropped by 6.7%, the steepestdecline in this area of any region, contributing tothe territory’s overall slower growth. 14.0%North AmericaNorth America recorded another year of doubledigit growth, increasing by 14.0%, albeit at aslightly lower rate than in 2017 ( 17.1%). Strongstreaming growth ( 33.4%) offset the declinein physical revenues (-22.0%), which showed amarkedly faster rate of decline than the previousyear (-4.3%). Whilst Canada remained flat ( 0.5%),the US posted an increase of 15.0% and maintainedits position as the world’s largest music market. Apredominantly digital market (74.2% of recordedmusic revenues), the fastest growing format in theUS was paid streaming, which accounted for wellover half (59.4%) of digital revenue.17

18THE DYNAMIC NATURE OF HIGH-POTENTIAL MARKETSIFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYThe DynamicNature ofHigh-PotentialMarketsRecord companies’ increasedlevels of investment – alongsidethe continuous geographical rollout of infrastructure – is drivingthe dynamic development ofhigh-potential markets. As partof this process, record companiesare taking their artists’ music to anever-expanding and truly globalaudience, whilst fans are benefitingfrom easy access to an increasinglydiverse catalogue of licensed music,discovered and developed aroundthe world.For recorded music, a high-potential marketis typically classed as a country or region witha significant population, measured in tens,sometimes hundreds, of millions. They are marketsthat are becoming increasingly connected, andincreasingly digital, but where consumption,particularly the legitimate and monetisedconsumption, of music is significantly lower, percapita, than would be expected in a mature anddeveloped territory. Treated as a group, thesemarkets, even with modest penetration, couldprovide a major uplift to the global streamingpopulation. Led by record companies, the processof growing high-potential markets is one that isproviding substantial benefits and opportunitiesfor artists and fans alike, cross-pollinating musicand consumers around the world by channellingresources and focus on local territories.‘A WILLINGNESS TO INVEST FOR THELONG TERM’Adam Granite, Executive Vice President, MarketDevelopment, Universal Music, says: “Every marketrequires a unique approach, but I think what’s mostencouraging in all these high-potential markets isthat local repertoire is growing significantly.”The one common thread linking the territories,he continues, is “a determination to find the bestartists, the importance of our local teams, and awillingness to invest for the long term.”Jeremy Marsh, Chief Global MarketingOffice, Warner Music, says: “Many predicted theglobalised world of streaming would see Anglorepertoire flood other markets. But whileinternational opportunities for Anglo artists haveincreased, we’re also seeing a huge flow of musicback the other way. We’ve seen this with musicfrom markets such as Latin America and Korea, andwe’re starting to see it with music from regions likeAfrica too.”Every market requiresa unique approach,but I think what’s mostencouraging in all thesehigh-potential marketsis that local repertoire isgrowing significantly.ADAM GRANITEExecutive Vice President, Market Development,Universal Music

IFPI GLOBAL MUSIC REPORT 2019 // STATE OF THE INDUSTRYTHE DYNAMIC NATURE OF HIGH-POTENTIAL MARKETSWith access to streaming,people are able to reallytake a deep dive into Latinmusic and that’s great forthe artists and great forthe culture.AFO VERDEChairman/CEO of Sony Music Latin IberiaColleen Theis, COO of distribution companyThe Orchard, a unit of Sony Music Entertainment,says: “We've 40 offices all around the world that arealways looking for music that has local meaning.What’s exciting is that today we’re also able totake this across borders and introduce people tomusic that you wouldn't traditionally think is in thatcountry or culture’s wheelhouse.”Orchard’s CEO, Brad Navin, believes this is beingdriven by a younger cohort of music fans gainingaccess to streaming services: “The generation ofmusic fans that are now on streaming platforms areyounger and have a completely different mindset.They think globally and great music is crossing overregardless of language.”Granite picks up on the increasing opportunitiesfor Anglo artists to connect with global audiences:“Our local teams actively help grow our artists’audiences, and this amazing repertoire is nowbeing heard and loved in parts of the world thatwere previously unreachable or, if they werereachable, were not monetised. Now they’re on apar with all major markets in terms of their accessand the quality of the offering.”Gabriela Lopes, Senior Vice President, GlobalIns