The German music industry faced a notable slowdown in growth during 2025, primarily attributed to modest gains in streaming and a significant decline in physical sales. According to the latest annual report from the Bundesverband Musikindustrie (BVMI), the overall recorded music sales in Germany reached $2.83 billion (�2.42 billion) last year, marking the slowest annual growth in several years with a mere 2.3% year-over-year increase.
Despite the overall revenue growth, the digital segment saw a boost, largely driven by streaming, which accounted for $2.43 billion (�2.08 billion) in sales, reflecting a 3.8% increase from the previous year. On-demand streaming services have become the dominant revenue source, contributing 84.4% of digital income, while permanent downloads lagged significantly at just 1.4%.
However, the physical sales sector continued to struggle, with a 5.9% decline, totaling $403 million (�345 million). This downturn was exacerbated by a substantial 11.3% drop in CD sales, despite a 2.8% growth in vinyl records. CDs still represent 56% of total physical revenue, highlighting the ongoing challenges faced by traditional formats. The decline in physical sales has been a consistent trend since at least 2016, with only a slight increase noted in 2022 and 2023.
In addition to these challenges, the report indicated that sync revenue grew by 7.2% year-over-year, contributing $14 million (�12 million), while neighboring rights revenue experienced a decline of 5.1%, estimated at $286 million (�245 million). BVMI noted that the final figures for neighboring rights are still pending, as they are influenced by one-time payments from previous years.
Florian Dr�cke, the chair of BVMI, commented on the current landscape, describing it as a “very challenging phase” amid the rise of artificial intelligence in the industry. He emphasized the need for strong copyright protections and the importance of innovative partnerships to navigate this dynamic market. While Germany’s music market faces hurdles, it is not alone; similar trends are observed in other developed markets, including the U.S. and various European countries. In contrast, emerging markets like Brazil, Mexico, South Africa, and China have reported substantial growth in recorded music revenue, indicating a shift in the global music landscape.