France, the world’s fifth-largest music market, will generate recorded music revenues of €920 million (US$967 million) in 2022, according to local trade body SNEP.
However, despite marking the sixth consecutive year of market growth, 2022 saw the margin of this growth decelerate, with market revenues rising by only 6.4%YoY.
In the previous year 2021, revenues from recorded music in France increased 14.3%YoY.
Paid subscription-based streaming that generates revenue from €426 million ($448 million) in 2022 goes to France major driver of recorded music revenue last year, increasing 11%YoY.
Streaming, from both ad-supported and paid subscription services, generates revenue 486 million euros ($511 million) in France in 2022, up 13.5% YoY.
Meanwhile, at the end of 2022, according to SNEP, there were 11 million payment of subscription bills in France, up with +1.0 million on an annual basis from 10 million in 2021 (These accounts were shared by 16 million users, via family plans, etc.)
This year-on-year growth in the number of subscription accounts in France has slowed compared to 2021, when the number of paid subscription accounts grew by +1.3 million compared to 2020
Indeed, the 16 million users of premium subscription accounts in France last year equated to about a quarter of the country’s estimated total population (≈66 million).
These figures have clearly caused concern among major record companies – SNEP’s largest members – and you can understand why: According to the latest figures from the IFPI Global Music ReportFrance was the fifth largest recorded music market in 2021 after the US (1), Japan (2), the UK (3) and Germany (4).
SNEP said in its annual update today: “Rregardless of age group, subscription-based streaming has struggled to reach the levels of other major music markets in France.
“Platforms and [labels] alike have a big challenge ahead of them: yes convinceconsumers, young and old, to make the switch to subscription-based services.”
So what’s to blame for subscription streaming’s “struggle” to keep growing in France?
One candidate is TikTok – and its rising levels of popularity among the territory’s young users.
“Record companies are multiplying musical experiences and revenue streams, adjusting their strategies… [including] redefining the role of TikTok, whose widespread use is driving users away from subscription services, the drivers of today’s music business model.”
Alexander Lash, SNEP
Citing a 2022 IFPI consumer survey, SNEP reports that while 77% of respondents say they discover new music through TikTok, 45% of young people in France, between the ages of 16 and 24, “claim to spend more time on TikTok than on online music services“.
SNEP’s managing director, Alexander Lash, said in a statement accompanying the new annual report that “the massive use of TikTok drives users away from subscription-based servicesthe drivers of today’s music business model”.
And as SNEP highlights France’s challenge to convince more music consumers to pay for music subscriptions, it notes in its report that TikTok and short videos “have reshuffled the deck in relation to music streaming”.
Lasch’s comments and the SNEP report on the “struggling” growth of subscription streaming in France come amid calls from some in the music industry for TikTok to pay rights holders more for the use of their music on its platform.
Many in the music industry argue that TikTok, which there is over 1 billion global monthly active users, is growing amid the popularity of music on its platform.
The news that TikTok may be “shifting users” away from properly monetized music on subscription platforms like Spotify or Apple Music in one of the world’s biggest music markets will only intensify calls for a change to TikTok’s royalty payment model.
Major record labels are likely to be watching developments in France very closely as they enter their next round of negotiations with the ByteDance-owned video platform.
“Record companies are multiplying musical experiences and revenue streams by adapting their strategies to the ever-changing playing field.”
Alexander Lash, SNEP
In his full statement, SNEP managing director Alexander Lash said: “Record companies are multiplying musical experiences and sources of income by adjusting their strategies to a constantly renewing playing field: limiting stream manipulation that distorts the rules of the game; redefining the role of TikTok, whose widespread use is driving users away from subscription services, the drivers of today’s music business model; integrating the many applications of artificial intelligence that are already influencing the way music is made and listened to.”
A slide in SNEP’s annual report noting that TikTok has “changed the deck for listening to music”
Elsewhere, SNEP’s year-end report revealed that, like other mature music markets, sales of vinyl records continued to grow, reaching 5.4 million units sold in 2022, generating €89 million in revenue for the French recorded music market.
This €89 million represents growth from 12.65%YoYwhich is significantly lower than the year-on-year growth seen in the previous year (+54.9%).
Elsewhere, the SNEP report highlights the success of local music in the market in 2022, noting that “French Music Productions” constitute 77% of the Top 200 best-selling albums last year.
Meanwhile, French-based artists account for 16 of the Top 20 most-listened-to and most-bought artists in France in 2022.
France’s annual recorded music revenue results arrive in the same week that neighboring Spain publishes its equivalent numbers.
According to Spanish music industry body Pro Musicae, the number of paid subscriptions in the Spanish market grew almost twice as fast as in France last year on a percentage basis – up 18%YoY to 5.2 million.
Meanwhile, in Japan, the world’s second-largest recorded music market, subscription streaming revenue in 2022 will reach ¥75.62 billion, translating into 575 million dollars at average annual exchange rates (according to the IRS) and represents revenue growth of 19% on an annual basis through paid music services such as Spotify and Apple Music.
All EUR-USD conversions in this story are made at the average annual exchange rate provided by the US Internal Revenue Service (IRS)
