The recorded music industry made $21.6bn (£15.7bn) last year, the highest figure since 2002.
Revenues grew by 7.4%, driven by the success of artists like Billie Eilish, Taylor Swift and Drake in the charts.
BTS had the best-selling album, Map Of The Soul: 7; while The Weeknd's retro-pop anthem Blinding Lights was the biggest single, shifting 2.7bn copies.
Streaming sites like Spotify and Apple Music accounted for 62.1% of all revenues, reaching $13.4bn (£9.7bn).
More than 443 million people now pay for a music streaming subscription, said the IFPI, which represents the global music industry.
That means 102 million people signed up for a new account last year, compared to 85 million in 2019, and 79 million in 2018.
However, while the number of subscribers jumped by 29%, revenues from streaming only grew by 19.5% - as price plans tend to be lower in new markets like India and Russia.
The figures, revealed in the IFPI's annual Global Music Report, are a reminder of "the enduring power of music to console, heal and lift our spirits," during the pandemic, said chief executive Frances Moore.
"Some things are timeless, like the power of a great song or the connection between artists and fans. But some things have changed. With so much of the world in lockdown and live music shut down, in nearly every corner of the globe most fans enjoyed music via streaming."