Germany’s Music Industry Growth Slows in Early 2025, Streaming Remains Key Driver

Germany’s recorded music market continued its growth trajectory in the first half of 2025, though at a slower pace than the previous year. Total revenue reached €1.157 billion (approximately $1.36 billion USD) from January to June, a 1.4% increase compared to the same period in 2024, according to the German Music Industry Association (BVMI).

Slowing Growth Compared to 2024

This growth rate represents a significant deceleration from the 7.6% year-over-year increase observed in the first half of 2024. The slower growth coincides with a period of economic stagnation in Germany, influenced by high energy prices, although recent data suggests a slight economic recovery with a 0.3% GDP growth in Q2 2025.

Streaming Dominates, Physical Sales Decline

Digital music sales, primarily driven by streaming, continue to be the dominant force in the German music market, accounting for 87.5% of total revenue. Digital sales rose 3.9% year-over-year, contributing over €2 billion in revenue. Yet, this growth was partially offset by a 13.2% decline in physical sales (vinyl and CDs).

CD sales experienced a particularly sharp drop of 20.1% year-over-year, though they still contributed 6.3% to overall sales. Vinyl records, although declining slightly by 2.6%, maintained a 5.6% market share, demonstrating continued consumer interest in physical formats.

Industry Optimism and the Role of AI

Despite the slowdown, industry leaders remain optimistic about future growth potential. Dr. Florian Drücke, Chairman & CEO of BVMI, stated that the industry is in “an exciting phase in which there is still potential for growth, even in developed markets such as Germany.”

The BVMI likewise highlighted the increasing importance of addressing the impact of artificial intelligence (AI) on the music industry. Drücke emphasized the need for European legislators to maintain a legal framework that supports digital licensing businesses, particularly in the context of AI-generated content and copyright law. The BVMI sees AI as both an opportunity and a potential competitor, stressing the importance of understanding and navigating the changes it brings to the music landscape.

Key Takeaways

• Germany’s recorded music market grew by 1.4% in the first half of 2025, reaching €1.157 billion.
• Streaming remains the primary driver of growth, accounting for 87.5% of total revenue.
• Physical sales continue to decline, with CDs experiencing a significant drop of 20.1%.
• The BVMI is focused on adapting to the challenges and opportunities presented by AI.

Sources: BVMI Press Release, Music Business Worldwide, Digital Music News, hiresaudio.online