Music has become a global economy and the next battle is already underway
Streaming has transformed how music is created, distributed and monetised, while artists from more countries are reaching international audiences and artificial intelligence is opening a new front over creativity, copyright and control.
FOSTER! NEWS | MUSIC
18 SEPTEMBER 2026
THE MUSIC INDUSTRY HAS ENTERED A NEW ERA
The global recorded music business generated US$31.7 billion in 2025, an increase of 6.4% from the previous year, according to the International Federation of the Phonographic Industry (IFPI).
It was the 11th consecutive year of growth.
The figures tell a story that would have been difficult to imagine during the collapse of the physical music market in the early 2000s.
Music is growing again.
But the business behind it has been fundamentally rebuilt.
STREAMING NOW GENERATES MOST OF THE MONEY
Streaming generated more than US$22 billion in 2025, representing 69.6% of global recorded music revenues, according to IFPI.
Paid subscription streaming alone grew 8.8% and accounted for 52.4% of the global recorded music market.
There were 837 million users of paid streaming subscription accounts worldwide.
The transformation is therefore no longer simply technological.
It is economic.
The music industry has moved from a model in which consumers largely bought individual recordings towards one in which audiences pay for continuous access to enormous catalogues.
THE ALBUM HAS NOT DISAPPEARED
Streaming dominates the market, but physical music has returned to growth.
Global physical revenues increased 8% in 2025, reaching approximately US$5.3 billion.
Vinyl was the strongest component.
Revenue from vinyl increased 13.7%, marking its 19th consecutive year of growth.
The revival is significant because physical music is no longer competing with streaming on convenience.
It is competing on something else.
Ownership.
Collectability.
Design.
Identity.
For part of the audience, the physical album has become an object rather than simply a method of listening.
VINYL IS BECOMING A CULTURAL PRODUCT
The return of vinyl does not mean the industry is abandoning digital music.
The opposite is happening.
Streaming provides immediate access.
Vinyl provides a physical relationship with an artist or album.
The two formats can therefore coexist because they fulfil different purposes.
A listener can stream an album every day and still buy a physical edition.
That combination has created an unusual market in which the oldest major format in the industry is growing alongside its newest dominant technology.
LATIN AMERICA IS THE FASTEST GROWING REGION
One of the biggest changes is taking place outside the traditional centres of the global music industry.
Latin America recorded 17.1% growth in 2025, making it the fastest-growing major region, according to IFPI.
The region has now recorded 16 consecutive years of growth.
Streaming accounted for 88.1% of recorded music revenues in Latin America.
Brazil's recorded music market grew 14.1%, while Mexico grew 13.3%.
Brazil consequently moved up to become the world's eighth-largest recorded music market, while Mexico became the 10th-largest.
The centre of gravity of global music is therefore becoming increasingly diverse.
THE NEXT GLOBAL SUPERSTARS DO NOT HAVE TO COME FROM ENGLISH-SPEAKING MARKETS
The global charts demonstrate how dramatically the language barrier has weakened.
Spotify reported that songs in 16 different languages reached its Global Top 50 during 2025, more than twice the number recorded in 2020.
Among the fastest-growing genres generating more than US$50 million in Spotify royalties were:
- Brazilian funk: +36%
- K-pop: +31%
- Latin trap: +29%
- Latin urban: +27%
- Reggaeton: +24%
The result is a music market in which audiences can discover artists without first crossing a linguistic or geographical boundary.
THE GLOBAL STAR SYSTEM IS CHANGING
IFPI's 2025 global artist chart illustrates the increasingly international character of popular music.
Taylor Swift ranked first, followed by Stray Kids, Drake, The Weeknd and Bad Bunny.
Kendrick Lamar, Morgan Wallen, Sabrina Carpenter, Billie Eilish and Lady Gaga completed the top ten.
The list combines artists operating across very different musical traditions and audiences.
That is increasingly normal.
Global music is no longer simply an American export industry.
It is becoming a network in which cultural movements can travel in multiple directions.
SPOTIFY PAID MORE THAN US$11 BILLION
The economics of streaming can be difficult to understand because the money does not flow directly from one listener to one artist.
But the scale of the system is enormous.
Spotify reported paying more than US$11 billion to the music industry in 2025, an increase of more than 10% from the previous year.
Spotify also reported that more than 13,800 artists generated at least US$100,000 from the platform alone during 2025.
More than 1,500 artists generated over US$1 million in Spotify royalties.
These are Spotify's own figures and should not be interpreted as equivalent to an artist's personal income: royalties can pass through labels, distributors, publishers and other rights holders.
But they demonstrate the scale of the new digital music economy.
THE NEW MUSIC CAREER CAN BE GLOBAL FROM DAY ONE
Another transformation is occurring beneath the superstar level.
Spotify reported that more than one-third of artists who generated at least US$10,000 in royalties in 2025 were DIY artists or had begun their careers independently.
The platform also reported that, on average, artists receive more than half of their royalties from outside their home country just two years after debuting.
That changes the economics of being an emerging artist.
A musician no longer necessarily needs to establish a large domestic audience before reaching listeners abroad.
A song can travel first.
The artist can follow.
YOUTUBE IS ANOTHER GIANT MUSIC ECONOMY
Streaming audio is only part of the digital transformation.
YouTube reported that it paid more than US$8 billion to the music industry between July 2024 and June 2025.
The platform also reported more than 125 million Music and Premium subscribers globally, including trials, and more than 2 billion logged-in viewers watching music videos each month.
Music consumption is therefore increasingly distributed across several ecosystems.
Audio streaming.
Video.
Short-form platforms.
Social media.
Gaming.
Live performances.
And physical products.
The song is no longer confined to one format.
LIVE MUSIC IS BENEFITING FROM DIGITAL DISCOVERY
Streaming does not necessarily end with a stream.
It can lead to a ticket.
Spotify reported that the platform had driven more than US$1.5 billion in gross concert ticket sales for artists by 2025.
That creates a new relationship between digital discovery and physical experience.
A listener can discover an artist through an algorithm, follow them online and eventually see them perform thousands of kilometres away.
The digital music economy is therefore increasingly connected to the live industry.
BUT THE INDUSTRY HAS A NEW PROBLEM: STREAMING FRAUD
The enormous scale of streaming has created an equally significant vulnerability.
Artificially generated streams can manipulate charts and divert royalties away from legitimate artists.
IFPI identified streaming fraud as an increasing threat to the industry in its 2026 report, describing organised manipulation of streams as a problem affecting the distribution of music revenues.
The issue is becoming more complicated as automated systems become more sophisticated.
The industry must determine which listening activity represents genuine human engagement and which represents artificial manipulation.
That is both a technological and economic challenge.
ARTIFICIAL INTELLIGENCE IS OPENING THE NEXT BATTLE
AI is now moving into almost every part of music production.
It can generate melodies.
Create sounds.
Assist with arrangements.
Transform voices.
Produce visual material.
And potentially imitate aspects of an artist's creative identity.
The technology could provide new tools for musicians.
But it also creates fundamental questions.
Who owns AI-generated music?
Can an artist's voice be replicated without permission?
Can copyrighted recordings be used to train models?
Who receives revenue when AI-generated material competes with human-created work?
IFPI says record companies are developing licensing models with generative AI developers while calling for copyright protections and respect for creators' rights.
The legal and commercial framework is still developing.
EUROPE IS ALSO REWRITING ITS MUSIC ECONOMY
Europe remains one of the world's major music markets.
IFPI reported that recorded music revenues in the European Union reached €6 billion in 2025, increasing 5.1% year on year.
The EU accounted for 21.3% of global recorded music revenues.
Nine of the world's 20 largest recorded music markets were located within the EU.
But Europe also illustrates the next challenge.
Paid music streaming penetration stood at 27% in the EU, compared with 54% in the United States and 47% in the United Kingdom.
There remains substantial room for further growth.
THE MUSIC INDUSTRY IS NO LONGER A SINGLE INDUSTRY
The modern music economy is an interconnected system.
A song can begin in a bedroom.
A producer can work remotely from another country.
A distributor can release it globally.
An algorithm can recommend it in Seoul.
A listener can stream it in Buenos Aires.
A fan can buy the vinyl in London.
A promoter can book the artist for a festival in Madrid.
And a video can turn the song into a global cultural phenomenon.
The barriers have not disappeared.
But many of them have changed.
FOSTER! ANALYSES
The numbers reveal an industry that has moved far beyond its old model.
Recorded music generated US$31.7 billion in 2025.
Streaming produced almost 70% of that revenue.
Vinyl continued to grow.
Latin America recorded double-digit expansion.
Music in more languages reached global audiences.
Independent artists gained new routes to international listeners.
And AI emerged as the next major technological and legal frontier.
But the transformation is not simply about technology.
It is about who gets heard.
The old music industry was built around physical distribution, radio, television, record shops and a relatively limited number of cultural gatekeepers.
The new industry is built around platforms, algorithms, global audiences and enormous catalogues.
That has opened doors.
It has also created new forms of competition.
The next decade will therefore be defined by a series of battles: human creativity against automated imitation, genuine listeners against artificial streams, artists against opaque algorithms, and local cultures against a global attention economy.
Yet one fact is already clear.
Music has never travelled so far, so quickly or in so many languages.
The next global sound may not come from the industry's traditional centres.
It may come from anywhere.
FOSTER! NEWS
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