Music industry on road to recovery
For the best part of two decades the record industry has been in apparent terminal decline, its income decimated by web piracy and the decline of CDs.
But the global music industry now appears to have turned a corner, with the growing popularity of paid-for online streaming services such as Spotify driving its first revenue increase for 15 years.
“The industry is on the road to recovery,” claimed Frances Moore, chief executive of the International Federation of the Phonographic Industry (Ifpi), which reported this week that global recorded music revenues rose by 0.3 percent last year to $16.5bn. All Saints and The Corrs were the biggest-sellers in 1998, the last year the music business recorded revenue growth, when the industry generated $27.8bn, all from physical releases.
The traditional music powerhouses of the UK, US and Germany are still struggling to complete the transition to digital as album sales continue to slump. The new growth is being driven by the spread of smartphones and tablets offering legal digital music services in Brazil, India, Mexico and Sweden.
Global hitmakers will increasingly come from South America and Asia. The biggest hits of last year included Gangnam Style by the South Korean rapper Psy, which attracted 1.2 billion YouTube views, and Ai Se Eu Te Pego by the Brazilian singer Michel Telo. The Portuguese-language song sold seven million downloads after its video went viral and footballers adapted the dance for goal celebrations.
The Ifpi’s Digital Music Report found that digital revenues increased by 9 percent to $5.6bn last year and now account for about 34 percent of global industry revenues.
Apple’s iTunes store still accounts for 70 percent of digital music revenues. However, the number of people paying to use subscription services leapt 44 percent last year to 20 million. Subscription revenues now account for more than 10 percent of all digital revenues.
The report said the recording industry annually invested 26 percent of its trade revenues ($4.5bn) in developing and marketing new talent.
British stars helped fuel the return to growth, with Adele’s 21 the biggest selling global album last year, (8.3 million copies). One Direction sold nearly nine million copies of their two albums.
However, the report found that about one-third of internet users globally (32 percent) are still using unlicensed file-sharing sites.
Google is poised to make a major intervention in the market with the launch of its own music streaming service, which will include millions of songs from major recording artists. Such a service would place Google in direct competition with Spotify.
Moore said the first growth for 15 years was “a hard-won success for an industry that has innovated, battled and transformed itself over a decade. The music industry has adapted to the internet and learnt how to meet the needs of consumers”. – The Independent