Culture shock: What 10,500 labels reveal about the Global South's genre story

We looked at the genre of record labels in terms of share of revenue, streams, and number of labels. The headline figures tell a predictable story, that mainstream genres like rock, pop, and hip hop dominate all three metrics. Meanwhile, Global South genres (e.g., Afrobeats, amapiano, K-pop, Arabic pop, Bhangra, Punjabi hip hop, phonk, sertanejo, cumbia, etc.) have around a fifth share of all three metrics. But it is the detail beneath the surface where things start getting interesting:

• Global South genres have a higher share of labels than revenue
• Earlier stage regions like Sub-Saharan Africa (SSA) and Middle East and North Africa (MENA) have a dramatic drop off from streams share to revenue share (in some cases revenue share is more than three times smaller than stream share)
• Global South genres are in fast growth markets

When considered together, these factors point to a crucial market dynamic: Global South genres are just getting going. They are building momentum that is not yet reflected in revenue figures. Over the next few years, we will see two key dynamics play out:

1. The streams-to-revenue share gap will narrow in markets such as Brazil, Mexico, and India due to strong subscriber growth, which shifts the streams balance from lower ARPU ad supported, to higher ARPU premium
2. Streams growth will accelerate across all Global South markets, but particularly in earlier stage regions like MENA and SSA

The first will be most visible, most quickly. But the second will be most important. Why? Because a growing number of Global South genres will start developing so much stream scale in their local markets that they will hit global streaming charts which will, in turn, fire up the recommendation algorithms and push this music to wider audiences. This is exactly the path that reggaeton followed, nearly a decade ago.

Right now, labels in regions like SSA and MENA export five times less of their music than US and European labels do. When their growing domestic streams trigger international volumes (travelling via diaspora populations), they will take a share of high-ARPU Western royalties. Global South labels’ export streams will disproportionately contribute to their revenue bases. Any smart label will quickly see the business model benefit of targeting Western listeners.

So, the coming years will see more Global South genres competing for both the culture and revenue of Western markets. Which means that Western rightsholders will face a double whammy of lower repertoire share in fast growing regions and increased share competition in their own core regions. Western rightsholders are of course actively pursuing Global South M&A strategies, but no amount of acquisition is going to be sufficient to keep up. The global cultural balance of trade is shifting.

There is, though, one scalable strategy available to Western labels: distribution. Western distributors and big labels have become the supply chain infrastructure of the Western streaming market. The opportunity to replicate this in Global South markets is clear. A small number of Western players saw the opportunity early, most notably Believe. Believe did not get much credit for building out sales teams years ago in nascent streaming markets but it is now set to reap the benefit of strategic foresight. For example, Believe distributes around half of all Turkish labels that feature in the top 10,500 labels globally. As Global South genres grow, so will it.

Keep a look out for our forthcoming State of the independent music economy report which will provide deep, detailed data and analysis of this 10,500 label dataset. This will be followed by a distributor’s market shares report.

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