Record labels have been around for centuries, and in the modern era, they are more important than ever. However, the industry is constantly changing, and different types of record label companies have been emerged and record label owners need to stay up-to-date on the latest statistics and trends. In this article, we will discuss current industry statistics, as well as market growth and future outlook.
Current Statistics of the Record Label Industry
First, let’s check out the current state of the industry. We will take a look at the current state of the market, how many people are employed in the industry, and how much revenue and earnings record labels are generating.
Market Statistics and Growth
- The global recorded music market was worth $26 billion in 2022, a continued yearly increase for the past 7 years.
- In 2022, the physical format accounted for 35% of the global recorded music market, while digital formats accounted for 65%.
- The music market makes up a small portion of the overall entertainment market, which was worth $1.2 trillion in 2020.
Employment Statistics
- The number of record label companies has declined in recent years, from 3,500 in 2000 to 2,500 in 2020.
- There are currently about 4,000 people employed by major record labels in the United States.
- The number of people employed by record labels has been on the decline since 2000, when there were about 7,000 people employed in the industry.
- The majority of these employees are based in New York City, Los Angeles, and Nashville.
- The average salary for a record label employee is $60,000 per year.
- The number of artists signed to major record labels has also declined in recent years, from about 10,000 in 2000 to 7,500 in 2020.
- The reason for these trends is the decline of the physical format and the rise of digital streaming services.
Revenue And Earnings Statistics
- On average, record labels make a revenue of $4.50 per album sold in the United States.
- This number has been on the decline in recent years, as the physical format has declined in popularity.
- The average cost to make an album is $45,000 to $50,000.
- The average album sells from 20,000 to 200,000 copies.
- The average digital earnings per album are $1,500.
- The average streaming royalties per album are $20,000 to $60,000.
- The average artist signed to a major label earns $60,000 to $200,000 per year.
- The typical annual revenue for a small independent label is $500,000.
- With an average profit margin of 15%, that leaves a profit of $75,000.
Additional Record Label Statistics
- The four major record labels are Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI.
- These four labels control about 70% of the global recorded music market.
- The other 30% is controlled by hundreds of small independent labels.
- In 2020, the top 10 best-selling artists in the world were all signed to major labels.
- The top 10 best-selling albums of 2020 were all released by major labels.
Future Outlook For the Record Label Industry
- The global recorded music market is expected to grow at a compound annual growth rate (CAGR) of 8.5% to reach a value of $30 billion by 2025.
- This growth will be driven by the continued rise of digital streaming platforms.
- The number of people employed by record labels is expected to continue to decline in the coming years.
- The number of artists signed to major labels is also expected to continue to decline.
- However, the average revenue and earnings per album are expected to increase as digital streaming becomes more popular.
- The overall future outlook for the record label industry is positive, with continued growth expected in the coming years.
- But, the biggest challenges the industry will face are the continued decline of the physical format and the rise of digital streaming.
Conclusion
The record label industry is facing some challenges, but it is still expected to grow in the coming years. The biggest challenge the industry will face is the continued decline of the physical format and the rise of digital streaming. But, despite these challenges, the industry is expected to continue expanding and remain profitable in the years to come.