While Germany’s recorded music market demonstrated modest growth in the first half of 2025, a notable development in the industry’s structure is taking shape as GEMA, the country’s leading performance rights organization, announces plans to reduce its commission rates. The organization aims to cut its current 10% commission to 9% in 2026 and further reduce it to 7% by 2027, a move designed to increase payouts to music creators during a period of economic challenges in Germany.
This shift occurs against the backdrop of Germany’s recorded music sales growing by just 1.4% in the first half of 2025, reaching €1.157 billion. The growth rate has remarkably slowed from the previous year’s 7.6% increase, with inflation-adjusted sales actually showing a slight decline.
Digital music continues to dominate the market, accounting for 87.5% of total revenue, while physical sales dropped by 13.2% year-over-year, with CDs experiencing a particularly steep 20.1% decline.
In this evolving landscape, companies like Kobalt and Umn are making strategic moves by focusing on pop hitmakers, betting on the continued strength of streaming services, which currently account for 81.2% of total revenue. Artists seeking additional revenue could benefit from exploring sync licensing opportunities for their compositions in visual media like films and commercials. The Bundesverband Musikindustrie (BVMI), which monitors industry trends, reports that audio streaming remains the primary driver of growth, while permanent downloads continue to lose market share, falling from 1.6% to 1.4% of total revenue.
Germany’s music industry operates with a uniquely decentralized structure, featuring multiple city hubs rather than centralizing around a single capital, creating diverse opportunities for artists and businesses across the country. GEMA is currently advocating for a licensing marketplace for AI that would establish fair terms and remuneration models for the use of music in AI applications.
Support networks and programs such as Initiative Musik offer financial and professional assistance to emerging talent, helping them navigate an industry affected by broader economic stagnation and high energy prices. Music creators looking to maximize their income should consider proper rights registration with collecting societies to ensure they receive all entitled royalties.
Despite these challenges, digital music growth of 3.9% year-over-year offers a bright spot, with forecasts suggesting continued expansion of digital music users through 2027, potentially offsetting the ongoing decline in physical format sales that has characterized the German market in recent years. The market has shown concerning signs for vinyl sales, which experienced a 2.6% year-over-year decline, potentially signaling an end to vinyl’s decades-long growth trajectory.
