COVID-19 will stop Spanish music growth in 2020 which saw an increase in revenues of 22.5% according to Promusicae, the Spanish recorded music industry association. The pandemic is forecast to reduce revenues by more than €100 million and the association is calling on the Spanish government to support the industry using ‘fiscal incentives, soft loans and music promotion campaigns to cushion the hard blow that the virus has also dealt to the recording industry’.
The Spanish music industry had a total turnover of €296.4 million in sales of recorded music in 2019 – an increase of 22.5% over the previous year, thus continuing the recovery of the sector that began in 2014.
The digital market now accounts for 75.3% of consumption in Spain amounting to €223.3 million. Revenues from streaming platforms account for 95.4% of the digital total (€213 million). A large part of this success is due to paid subscriptions on audio streaming platforms which now have over 3 million subscribers. Subscription revenue has grown by 34.9% compared to the previous year and accounts for 53.7% of total music sales. Revenues from ad-supported audio streams, which are growing by 27.9%, and those from ad-supported video streams such as YouTube (21% more than the previous year) lag behind.
The physical market grew by 7.2% (€73.1 million) as the CD format continued to be popular. Vinyl continued its recent revival making up one out of every four physical records sold in Spain.
Sales of physical products are expected to be particularly badly hit as a result of the crisis. Antonio Guisasola, President of Promusicae, said, “The damage will be particularly severe in the case of the sale of physical recordings (CDs and vinyl records), which are directly affected by the closure of music stores, at a time that is favourable to new releases, where it is estimated that half of the turnover will be lost, some €40 million for the year as a whole”,
He continued, “Losses on streaming platforms will be at least €50 million; in the case of subscriptions, the expected drop will suddenly break the strong growth trend of recent years”.
Contrary to what might be thought at first glance, lockdown has not triggered streaming revenues. According to information provided by the market research company Gfk, in the first week of the ‘State of Alarm’ there was an 11% drop in streaming music consumption, a phenomenon that has already been observed in Italy and other countries where lockdown has been imposed.
The impact on other revenue streams, such as synchronizations (use of music in advertising or audiovisual creations), revenues from concerts, sponsorships or licenses, sale of merchandising, or those related to the tours of their artists could represent several million euros more in the bill, while due to the closure of clubs, bars, pubs, hotels or shops with the State of Alarm and the decline in advertising revenues, intellectual property rights for public communication could suffer a drop of €12 million.
Promusicae has suggested a similar ‘cultural bonus’ funded by the State as has been proposed in Italy where young people can invest in cultural goods such as recorded music.
