Muhammad Ibadurrohman
The global recorded music industry achieved a significant milestone in 2025, with revenues accelerating to an unprecedented $30.4 billion, according to the International Federation of the Phonographic Industry’s (IFPI) latest annual Global Music Report. This robust performance marks the eleventh consecutive year of growth for the sector, defying a landscape increasingly challenged by the proliferation of generative AI songs and escalating streaming fraud. The impressive financial surge was widespread, with every major global region, from the established markets of the U.S. and Canada to the rapidly expanding territories of Sub-Saharan Africa, contributing to the record-breaking figures.
Subscription Streaming Remains Industry’s Core Engine
At the heart of this continued expansion is the unwavering dominance of subscription streaming, which in 2025 accounted for more than half of all global recorded music revenue. The IFPI report highlighted a substantial increase in paid subscriber numbers, reaching an astounding 837 million worldwide, a considerable jump from 752 million just one year prior. This growth underscores the global shift towards on-demand access and the willingness of consumers to invest in premium music experiences, providing a stable and predictable revenue stream that has fundamentally reshaped the industry’s economic model over the past decade. The continuous conversion of free-tier users to paid subscribers, alongside the expansion into new geographical markets, remains a critical factor in this upward trajectory.
Despite the overall positive outlook, the industry has grappled with a new generation of challenges. The rise of generative artificial intelligence has introduced a complex layer of issues, from unauthorized AI-generated tracks mimicking established artists to the broader implications for copyright and artist originality. Simultaneously, streaming fraud, encompassing illicit methods to artificially inflate stream counts, continues to pose a threat to fair compensation for artists and rightsholders, siphoning off potential earnings. These issues represent a new frontier for industry stakeholders, necessitating proactive measures in technology, legal frameworks, and platform governance to safeguard the integrity of the music ecosystem.
Global Growth Accelerates, Driven by Asian Markets
After a discernible slowdown in 2024, when global revenue growth decelerated to 4.7%—roughly half the rate of the preceding year and prompting concerns of a potential plateau—the 2025 figures offer a substantial measure of relief. The IFPI report indicates that overall revenue growth accelerated to 6.4%, a small but critically significant gain that reaffirms the industry’s vitality and adaptive capacity.
A significant portion of this renewed momentum emanated from Asia, where recorded music revenue witnessed a near tenfold increase in its growth rate, surging from a modest 1.3% in 2024 to an impressive 10.9% in 2025. This remarkable acceleration was largely propelled by colossal revenue gains in China and a robust rebound in Japan, the world’s second-largest music market. Japan, which had experienced an alarming flattening of growth in 2024 at -0.2%, bounced back vigorously to an 8.9% increase last year. The Japanese market’s unique reliance on physical sales, combined with cultural and institutional obstacles to digital adoption, presents a fascinating case study in balancing tradition with technological evolution. Nevertheless, its strong performance in 2025 indicates a significant positive shift. In fact, Asia, alongside the U.S./Canada region, was one of only two major global regions to exhibit accelerated growth momentum in 2025, underscoring its pivotal role in the industry’s global resurgence.
China Ascends, Overtaking Germany in Market Size
A testament to the shifting geopolitical and economic landscape of the music industry, China officially surpassed Germany to become the world’s fourth-largest music market in 2025. This landmark achievement underscores the immense power and burgeoning potential of the Chinese market, which recorded an astounding 20.1% revenue growth in 2025—more than double its growth rate from the previous year. With a population exceeding 1.4 billion people, China represents an enormous, relatively young market where a vast reservoir of potential paying subscribers remains largely untapped.
The growth in China is not merely quantitative but also qualitative. The number of paid subscribers continues to expand, complemented by an increasing segment of users willing to opt for premium tiers, thereby elevating the market’s average revenue per user (ARPU). This trend is supercharging streaming revenue gains. Recent earnings reports from Tencent Music, China’s dominant music streaming service provider operating platforms like Kugou Music, QQ Music, and Kuwo Music, illustrate this phenomenon vividly. The company reported a 12% growth in its "Super VIP" tier users over mid-2025, with these high-value subscribers now constituting approximately 15.7% of its 127.4 million total paying subscribers. This strategic embrace of premiumization is a key driver behind China’s rapid ascent in the global music hierarchy.
Latin America’s Enduring Surge
Latin America continued its impressive growth trajectory, marking its sixteenth consecutive year of expansion in 2025. While the percentage of revenue growth saw a slight moderation year-over-year—falling from 22.5% in 2024 to 17.1% in 2025—the region’s consistent double-digit growth remains a powerful indicator of its vibrancy. Streaming remains the dominant force, accounting for over 88% of all recorded music revenue in Latin America, showcasing a deeply embedded digital consumption culture.
Within the region, Mexico emerged as a particularly bright spot, with revenue increasing by 13.3%, solidifying its position as the tenth-largest recorded music market globally. This sustained growth in Mexico is largely attributable to the global explosion of Música Mexicana, a genre that has transcended borders due to increased investment by labels and the unprecedented ease of music circulation afforded by streaming platforms. As Tomas Rodriquez, President of Warner Music Mexico/Música Mexicana, eloquently stated in the IFPI report, "Música Mexicana didn’t suddenly appear – it’s always been big. What changed is how easily it can now travel." The strategic expansion of major labels and companies, including HYBE’s launch of a regional Mexican label in September, signals further robust growth on the horizon for this culturally rich and economically dynamic market.
Brazil also made significant strides, overtaking Canada to claim the position of the eighth-largest recorded music market globally. This ascent is the culmination of years of sustained investment by major U.S. labels, including Sony Music’s acquisition of the prominent Brazilian label Som Livre for over $250 million in 2021, and Warner Music’s strategic bolstering of its presence in the country in 2024. Universal Music Group further underscored the market’s potential, reporting double-digit subscription growth in Brazil in its Q3 results last October. These investments highlight the strategic importance of Latin America as a growth engine for the global music industry, driven by a young, digitally-savvy population and a rich tapestry of musical traditions.
Physical Revenue Defies Digital Dominance, Driven by Vinyl’s Resurgence
In a notable development, 2025 marked only the second time on record that physical revenue growth outpaced digital growth, registering an 8% increase compared to digital’s 7.7%. This unexpected resurgence was significantly influenced by the aforementioned rebound in Japan, which holds the distinction of being the world’s largest market for physical music. The downturn in Japan in 2024 had contributed to a 3.1% global decline in physical revenue, making its 2025 recovery all the more impactful.
The primary driver behind last year’s spike in physical revenue is the enduring and accelerating popularity of vinyl records, which experienced a remarkable 13.7% revenue gain. This increase is not solely a reflection of unit sales but also, notably, the growing average price tag of vinyl and the strategic trend of artists maximizing revenue from their most dedicated "superfans" through the release of multiple vinyl variants. This relatively new phenomenon, distinct from the vinyl market of the 1970s and 80s, leverages fan engagement and collector culture, demonstrating a sophisticated evolution in artist-fan economics and direct-to-consumer strategies.
Artists’ Share of Industry Revenues Sees Incremental Increase
The share of industry revenues allocated to artists witnessed a slight but significant uptick year-over-year, rising from 34.8% in 2024 to 35.5% in 2025. While seemingly a modest increment, this figure represents a substantial increase over the past decade, considering that artists’ share of recorded music revenue stood at 31% in 2016. This upward trend signifies more generous revenue splits for artists, a direct reflection of their enhanced leverage in an evolving industry landscape. Artists now possess an unprecedented array of choices in how and where to release and finance their music, from independent distribution platforms to direct fan engagement models. This increased autonomy and optionality empower artists to negotiate more favorable deals with labels and platforms, fostering a more equitable distribution of the industry’s expanding wealth.
The Pervasive Threat of "Deepfake" Songs
Amidst the celebratory figures, the IFPI report also cast a stark spotlight on an escalating and increasingly pervasive problem: AI-generated "deepfake" songs. During the global launch event for the report, Dennis Kooker, President of Global Digital Business & U.S. Sales at Sony Music, revealed the alarming scale of this challenge. Kooker stated that Sony Music had requested the removal of over 135,000 AI-generated deepfake songs from streaming services. These tracks, designed to impersonate Sony artists including global icons like Beyoncé, Harry Styles, and Queen, represent a direct threat to artist integrity and intellectual property.
Kooker elaborated on the severe implications, asserting that "In the worst cases, [the deepfakes] potentially damage a release campaign or tarnish the reputation of an artist." He further explained the insidious nature of these AI creations: "The problem with deepfakes are they are a demand-driven event. They are taking advantage of the fact an artist is out there promoting their music. That is when deepfakes are at their worst – building off and benefiting from the demand the artist has created [and] ultimately detracting from what the artist is trying to accomplish.”
Sony’s disclosures underscore a critical point: more than a decade into the streaming revolution that successfully shored up the music industry’s bottom line after years of piracy-induced decline, a new and even more powerful technological adversary has emerged. Bad actors are now harnessing advanced AI to create convincing imitations, threatening to erode industry revenues once more and, more profoundly, undermine the authenticity and trust that underpin the relationship between artists and their audience. The battle against deepfakes and streaming fraud will undoubtedly be a defining challenge for the music industry in the coming years, requiring a concerted effort from labels, platforms, and policymakers to develop robust protective measures and enforce ethical AI usage. The industry’s ability to navigate these complex technological and ethical waters will be crucial to sustaining its remarkable growth trajectory and ensuring a fair and creative environment for artists worldwide.
