Just 20% of creators make a living from dance music, despite industry growing by 34% in 2022

Just 20% of creators made a living from dance music in 2022, despite a huge industry growth of 34% - the annual IMS Business Report has revealed.

The report, which was unveiled at the International Music Summit (IMS) at Destino Pacha, Ibiza on April 26, revealed that the dance music industry had a valuation of $11.3 billion in 2022, an increase of 34% from 2021 and a 16% increase on pre-pandemic levels.

Despite this, just 20% of dance music creators solely make a living from music — while 35% have dance music as part of their income. 45% reported making "zero" income from dance music.

The report also revealed that the value of music publishing in dance music had risen by 17% in 2022, but streaming remained the big hitter in the industry — with a valuation of $20 billion in 2022.

Spotify had the highest market share, but of just 30% — with dance music audiences using a number of platforms to listen to music.

Despite this, dance music's share on streaming platforms remains dwarfed by hip hop, which on average is listened to 2.5 times more by users. However, on TikTok and YouTube, dance music has a far higher follower share — 3.5 times that of hip hop.

Alarmingly, the report also revealed that despite an increase in bookings for electronic acts across the board — the number of female DJs getting hired for festivals and other events is just 15%, down from 21% in 2022. While women saw a 199% increase in bookings, male DJs saw an increase of 344%.

Tech house remains the most popular genre of dance music, according to statistics from Beatport shared in the IMS Business Report, with trance falling out of the top 10 — however, 33% of users listen mostly to music which is outside of the 10 biggest selling genres.

The year 2022 marked a return to reality for the recorded music industry as the annual growth rate experienced a decline, falling from 25% in 2021 to 7% in 2022. Factors contributing to this dip include decelerating growth in established streaming markets; the global economy; fluctuations in currency and a stabilization of growth following the post-Covid boom in 2021. Future growth beyond streaming is anticipated to come from non-DSP platforms (such as TikTok) and expanded rights. Self-releasing artists, constituting the fastest-growing segment, captured 6% of the market share, while major labels experienced a slight decrease in market share from 66% in 2021 to 65% in 2022.

Music publishing has emerged as a lucrative segment in the music industry, attracting numerous investors interested in acquiring catalogues. The establishment of Armada’s $100 million fund signals that dance music could be the next sought-after genre. Traditionally viewed as a stable investment, music publishing has begun to outpace recordings, expanding over twice as quickly in 2022. This growth has been supported by consistent enhancements in rates paid to publishers and songwriters, indicating that songwriting is gradually attaining its true worth in the streaming economy.

In 2022, the number of subscribers outpaced subscription revenue. Although this led to reduced ARPU, it highlights the strong consumer demand even amidst challenging economic conditions. Spotify continues to be the dominant player, but the market is becoming increasingly diverse, with YouTube and Amazon making significant gains. The most substantial growth is taking place in emerging markets, particularly China. The mid-to-long term trajectory of streaming will be determined by these emerging markets, as rapid user growth will amplify their global impact on music culture.

Despite a faltering global economy, top music industry companies witnessed robust growth across all segments. Live music experienced the most significant growth, with Live Nation’s revenues surpassing pre-Covid levels. Publishing also saw a strong uptick, outperforming recordings, attributed to non-DSP platforms (such as TikTok), rate settlements, and organic improvements to licensing rates. In 2022, while various sectors of the economy, including some of the largest tech companies, faced challenges, the music industry’s leading corporations thrived, with live and publishing sectors taking the lead.

Collective revenue for top record labels rose by 9% in 2022, with growth varying among companies. While the three Western major labels collectively increased their revenue by 8%, HYBE saw a 24% growth and Believe experienced a 19% rise. Although shifts in the record label market occur relatively slowly, the new generation of large independent labels is quickly gaining market share. Coupled with the ascent of direct-to-artist and streaming-native smaller indies, the global recorded music market is entering a transformative era.

The pandemic wreaked havoc on live music worldwide, severely impacting both small venues and stadiums. While many smaller establishments continue to face challenges in rebuilding, the broader industry is thriving once again. In a music landscape dominated by convenient yet impersonal streaming, live music remains a unique and scarce experience that consumers crave more than ever after two years of lockdowns.

Key implications

• The music industry’s resilience in the face of economic adversity underscores the fundamental role music plays in people’s lives, particularly during difficult times.
• As recorded music transitions to a steady, long-term growth pattern, its future will be defined by the emergence of independent labels, self-releasing artists, and developing markets. Diversity will be the hallmark of the industry.
• Although live and publishing sectors may not sustain the same growth rate seen in 2022, they will continue to expand their share of the overall music industry mix.

The US, Germany, and the UK boast the largest Spotify monthly listener bases for electronic music, but they are also among the world’s biggest music markets. However, while the Netherlands and Australia may be smaller in absolute terms, their listener share of the total population is significantly higher (Netherlands’ rate is seven times greater than the US), indicating a stronger cultural reach and impact for electronic music in these markets. It’s essential to look beyond sheer numbers; smaller, passionate markets can serve as cultural catalysts for regional and global success.

The growth of electronic music’s fanbase is most prominent on social platforms, particularly TikTok, where it is expanding ten times faster than hip hop. However, in terms of on-streaming follower growth, hip hop significantly outpaces electronic music. Hip hop’s social base is over four times larger than dance music, but electronic music is closing the gap. On streaming platforms, the follower count is 3.5 times greater, potentially allowing hip hop to establish a similar lead as it has on social platforms (for now!). Nevertheless, hip hop’s lead in stream count is smaller (2.5 times greater), and electronic music is growing at the same rate on both Spotify and YouTube.

A mere 20% of dance music creators make a living from their craft, but for most of the remainder, it remains a passion rather than a mere hobby. Despite intense competition for audience attention, dance music creators continue to forge their careers.

Women in the industry experience significantly more pressure to maintain their appearance compared to their male counterparts and are more likely to encounter unconscious bias. Additionally, women tend to find it more challenging to stand out and secure the financial resources necessary for success. However, female creators are more likely to adopt a structured career approach, making more extensive use of design and project management tools.

Electronic music artists made up 39% of all festival bookings in 2022, up from 33% in 2021. Although female DJs represented 15% of top 100 DJ bookings (festivals and other events) in 2022, this share dropped from 21% in 2021. During the post-Covid return to live events, male top 100 DJs experienced booking growth 1.7 times faster than their female counterparts. As popularity and bookings form a virtuous circle, female DJs losing share of bookings to male counterparts could turn this into a vicious cycle.

Key implications:

• With fierce competition for attention, it’s more important than ever to focus on scenes, cultural reach, and the broader identity of dance music fans.
• The traditional distinction between professional and hobbyist is becoming less relevant. Passionate hobbyists can now achieve streaming hits without intending to make a living from it.
• As more people create music (accelerated by AI), cutting through the clutter will become more challenging, meaning producers and DJs must improve storytelling to more people in more places.

In 2022, Ibiza club ticketing revenue reached €124 million, a 55% increase from €80 million in 2019. This growth was driven by a rise in events per venue, average ticket prices, and total ticket sales (2 million in 2019 to 2.5 million in 2022). The 2022 figures show that club culture is stronger than ever post-Covid.

The fact that the top four Beatport genres contain the words ‘house’ or ‘techno’ points to the prevailing sounds of today’s dance culture. Meanwhile, the rapid rise of dance/electropop and indie dance, along with trance falling out of the top 10, suggests shifting cultural trends. Notably, 33% of all Beatport sales come from genres outside the top 10.

Although Loopmaster’s top three searched-for genres align with Beatport’s most downloaded genres, the extensive range of genres searched highlights the diversity of electronic music production. Dance music producers are pushing beyond the top three genres to create a melting pot of niches and scenes.

In 2021, TikTok launched #ElectronicMusic as its latest genre campaign and hosted LIVEs featuring Disclosure, BICEP, and David Guetta. As of March 2023, average daily creations for #ElectronicMusic have increased by 113% since June 2022. Several UK singles for electronic artists that went viral on TikTok since 2022 include:

• Calvin Harris & Ellie Goulding - Miracle
• LF System - Afraid to Feel
• Eliza Rose - Baddest of Them All
• David Guetta - I’m Good (Blue)

Mixmag celebrates its 40th anniversary in 2023, maintaining its tradition of being at the center of dance music culture and evolving with the genre. From its pioneering UK print magazine roots to today’s global, multi-platform presence, Mixmag’s YouTube channel boasts 460 million views and 108 million hours viewed. India has become a focus territory, with successful residencies in Mumbai and Goa from 2019 to 2022. Mixmag’s Lab India reaches 50 million dance fans and is on track to reach 100 million in 2023.

In addition, Mixmag hosted a special Lab at the International Music Summit (IMS) at Destino Pacha, Ibiza on April 28.

SoundCloud has always played a special role in dance music culture, hosting DJ sets, mashups, rarities, and providing a platform for DJs and producers to connect with fans. SoundCloud’s importance is underscored by the sheer scale of its 320 million tracks and 40 million creators. Dance and electronic music on SoundCloud saw significant growth in 2022, with plays increasing by nearly a quarter compared to 2021.

Top 5 global dance/electronic genres on SoundCloud:

1- House
2- Hardcore
3- Trance
4- Dubstep
5- Techno

Top 5 global scenes and dance/electronic communities on SoundCloud:

1- UK/Irish dance
2- Hardstyle
3- Vinahouse
4- Hard/industrial techno
5- Melodic house and techno

Globally, post-lockdowns, hard and fast genres became harder and faster. Genres like hard techno and industrial saw a 13% increase in BPMs since 2018 and a 144% increase in plays in 2022 YoY. Listener numbers for these styles increased by 89%. Countries with the highest consumption of these styles included Germany, Australia, the UK and Ireland, Netherlands, and Spain.

Drum and bass became the third most popular UK dance/electronic genre and one of the most searched-for terms, experiencing a 59% rise in plays versus 2021. Tracks from artists like Venbee, Hedex, Bou, and Goddard topped the SoundCloud charts. The surge in popularity of dance/electronic tracks from UK and Irish artists, such as Ewan McVicker, Eliza Rose, Schak, Belters Only, and LF System, helped House retain the number one position.

Beatport had another strong year, continuing to grow industry-critical download sales despite the wider download market’s ongoing decline. Download sales have increased 5-10% annually since 2017. The Beatport Group also continues to build a wider dance music ecosystem, acquiring LabelRadar and ampsuite in 2022, following its 2020 acquisition of Loopmaster. Beatport’s DJ streaming service is gaining traction, with strong international subscriber growth (Japan +85%, Netherlands +38%, Brazil +34%).

Music production boomed during the pandemic. Although growth slowed in 2022, revenues reached $6.6 billion, with $2.8 billion attributed to dance music producers and DJs. As music software use spreads across all genres, dance music sounds and techniques will influence a broader range of music.Skills sharing and learning experienced the fastest growth, worth $ 108 million in 2022. Demand for these skills is expected to increase due to rapidly evolving production techniques and new software. This area will be a long-term growth sector for dance music, as producers continuously seek to improve their skills and adapt to the ever-changing world of music production technology and techniques.

2022 – A return to (almost) normal

• Live: 2022 was a significant year for the live industry. The top 100 global tours saw revenue up by 276% (Pollstar), Live Nation’s revenues increased by 166%, and bookings for the top 100 DJs rose by 314% in 2022 (Viberate). Dance music live revenues were up 65% on 2021, reaching $4.1 billion, which is still slightly below the 2019 total of $4.4 billion and represents a significant decline in industry share. Therefore, more growth is still to be unlocked.
• Recorded and publishing: Combined revenues increased by 13%, reaching $1.9 billion. Dance music largely grew in line with the broader markets but slightly increased its share.
• Production music and hardware: Including studio and DJ equipment, electronic music instruments, software, sounds/samples, and skills sharing/analysis, this essential sector grew by 7%, reaching $2.8 billion. This growth was broadly in line with the total market.

In 2022, festivals and clubs rebounded, finally shaking off most of the effects of the pandemic, representing nearly half of all dance industry revenues. Hardware and software were the next largest revenue sources, but also the slowest growing. Music rights (recordings and publishing) grew by 14%, representing just under a fifth of the total, with publishing experiencing the fastest growth. Dance music industry revenue is now more diversely spread than pre-pandemic.

• The pandemic highlighted the industry’s heavy reliance on live events. Now, that reliance is even higher due to live events’ massive growth.
• Two key differences from 2019 are: 1) a resurgent creator tools sector, and 2) a music publishing business that is finally beginning to find its share.
• The future looks bright as the rise of creator culture continues to bring more people into dance music, both as fans and creators. The creator-fan will be at the center of tomorrow’s dance music world.