Music Industry Just Had Its Best Year On Record. The Revenue Is Real. So Are The Risks Sitting Right Behind It.
Eleven consecutive years of growth. Every region on earth posting gains. Revenues crossing US$30 billion for the first time in history.
Take a moment with that. It is genuinely remarkable.
Now keep reading. Because the same report that documents this milestone also describes an industry being quietly hollowed out from the inside. The revenue line goes up. The ecosystem underneath it is under real and growing pressure.
Both things are true. The industry needs to hold both at the same time.
Subscription streaming is pulling away. For good reason.
Streaming now accounts for 69.6% of all global recorded music revenues. Subscription streaming alone crossed 52% of total revenues in 2025.
But the number that actually matters is the gap. Subscriptions grew 8.8%. Ad-supported grew 4.3%. That separation is not a coincidence and it is not closing.
A paying subscriber is a retained listener. They show up every month. Their behavior is consistent, trackable, and commercially meaningful. Ad-supported streaming has value for discovery, particularly in markets where paid penetration is still developing. But it is not the revenue engine. It never was.
Monthly listener counts without retention underneath them are vanity metrics dressed as strategy. The artists and teams who understand the difference are building differently because of it. The ones who do not are optimizing for a number that does not pay the bills.
Physical growing 8% is not a nostalgia story.
Vinyl's 19th consecutive year of growth. CDs up. Physical revenues up 8%, the fastest growth of any format in 2025.
This is not fans being sentimental. This is superfans expressing identity.
A limited vinyl pressing, a deluxe edition, a physical release with genuine creative thought behind it: these are fan relationship tools. They tell you exactly who your most committed listeners are. They give those listeners a way to signal that commitment publicly, in a way a stream never can.
The format and the fanbase are doing different jobs now. Labels and artists treating physical as an afterthought in release planning are leaving both revenue and audience intelligence on the table. The data has been saying this for nineteen years.
The centre of gravity in recorded music has moved. Most strategies have not caught up.
Latin America grew 17.1% in 2025. Sixteen consecutive years of growth. Brazil is the eighth largest music market globally. Mexico is tenth.
MENA grew 15.2%. Sub-Saharan Africa grew 15.2%. Southeast Asia grew 9.3%. China grew 20.1% and overtook Germany to become the fourth largest market in the world.
These are not emerging market footnotes. These are the markets driving the global story right now.
Música Mexicana is the clearest example of what this looks like in practice. A genre rooted in specific communities, specific geographies, specific lived experience, is now a global movement. Warner Music did not sanitize it for export. They built infrastructure that allowed the culture to travel intact. The border disappeared because the authenticity was protected, not because the edges were smoothed down.
That principle holds everywhere these markets are growing. The artists breaking through from Southeast Asia, MENA, and Sub-Saharan Africa are connecting globally because the music is specific. Specificity is not a barrier to global reach. It is the condition for it.
85% of AI-generated music streams were fraudulent in 2025.
Sit with that number for a moment.
Deezer alone received 60,000 fully AI-generated tracks every day in January 2026. Of all streams on AI-generated music, 85% were fraudulent. Up from 70% the year before. The trend is moving in one direction.
This is not a policy debate happening somewhere above the waterline. This is money being taken directly from artists and redistributed into criminal networks. The royalty pool is finite. Every fraudulent stream is a direct transfer of revenue away from a legitimate creator. At scale, it reduces what labels can reinvest in artist development. It corrupts the algorithmic data that drives discovery and playlist placement. It degrades the very environment that artists, brands, and venues are trying to operate inside.
The major record companies are not anti-AI. They are actively partnering with developers who respect copyright and seek proper licensing. The distinction being drawn is not between old industry and new technology. It is between authorized use and exploitation without compensation.
That distinction matters enormously. Anyone collapsing those two positions is either confused about how the industry works or not arguing in good faith.
Enforcement alone cannot solve this at scale. The report is explicit about that. Until DSPs, distributors, and aggregators commit to meaningful identity verification, content vetting before upload, and cross-platform intelligence sharing on known bad actors, the fraud will keep scaling. The tools exist. The collective commitment to using them does not yet.
The artists who last do not skip steps. The 2025 data confirms what the best in this business already know.
The report profiles three artists at different stages of their careers: Tate McRae, Balu Brigada, and Olivia Dean. Different genres, different markets, different trajectories.
The same thread runs through all three.
McRae's label watched fans drive You Broke Me First themselves before they moved. They did not manufacture the moment. They recognized it and scaled it. The instinct preceded the data. Olivia Dean played every support slot available for years before Glastonbury. The Grammy came after, not before, the groundwork was laid. Balu Brigada physically relocated from New Zealand to New York to Berlin before claiming a global audience. The sold-out headline shows and five million monthly Spotify listeners followed years of community building, not the other way around.
None of these are stories about volume or velocity. They are stories about depth of connection at each stage before the next stage is attempted. That is the model. It has always been the model. The platforms change. The principle does not.
The revenue is real. So is the work still ahead.
The markets doing the most interesting things right now are not the mature ones. Latin America, Southeast Asia, MENA, Sub-Saharan Africa: streaming penetration is still growing, local repertoire is gaining real commercial strength, and the relationship between artist and audience is being built for the first time in many of these places.
For artists, labels, brands, and venues trying to position for what comes next, the question is not which platforms to be on. The question is which communities are forming, where they are forming, and whether the work is specific enough to be genuinely felt.
Eleven years of consecutive growth built something worth protecting. The structural decisions being made right now, around AI licensing, fraud enforcement, local market investment, and how patient we are willing to be with artist development, will determine what the next eleven years look like.
The number is US$31.7 billion. The story behind it is still being written.
Three questions for the people building inside this industry:
Subscription streaming pulled significantly ahead of ad-supported in 2025. Do you think that gap keeps widening, or does ad-supported find a structural answer in the next few years?
85% of AI-music streams were fraudulent last year. Who do you think has the most real leverage to fix this: the DSPs, the distributors, or the labels?
Physical grew faster than any other format in 2025. Is your organization treating it as a genuine strategic channel, or is it still an afterthought in how you plan releases?
Drop your thinking in the comments. These are the conversations worth having.
The Cultural Economy is a weekly newsletter by Viva Music exploring the ideas, data, and decisions shaping the music industry.
All data and findings referenced in this edition are drawn from the IFPI Global Music Report 2026. The full report is available at https://www.ifpi.org/resources/
Originally published in The Cultural Economy on LinkedIn on April 22, 2026.
