Global digital music revenues match physical format sales for first time
News: 15th April 2015 by Louise Dodgson under Finance, Law & Music Business, Music Publishing, Record Labels
Revenues from digital music services match those from physical format sales for the first time, according to IFPI’s Digital Music Report, published today. Download your free copy of the report here.
Digital revenues rose 6.9 per cent to US$6.9 billion, representing 46 per cent of all global music sales and underlining the deep transformation of the global music industry over recent years. The industry’s overall global revenues in 2014 were largely unchanged, falling just 0.4 per cent to US$14.97 billion (US$15.03 billion).
The new report shows an industry in continuing transition, with consumers embracing the music access models of streaming and subscription. Another steep increase in subscription revenues (+39.0%) offset declining download sales (-8.0%) to drive overall digital revenues, while the number of paying users of subscription services rose 46.4 per cent to an estimated 41 million.
Subscription services are now at the heart of the music industry’s portfolio of businesses, representing 23 per cent of the digital market and generating US$1.6 billion in trade revenues. The industry sees substantial further growth potential in the subscription sector, with new services advancing in 2015 led by three major global players: YouTube’s Music Key, Jay Z’s TIDAL and Apple’s expected subscription service.
Frances Moore, chief executive of IFPI, says: “The recorded music business has always led the way for creative industries in the digital world. That leadership continues today as the music industry’s digital revolution continues through new phases, driven by the consumer’s desire for access to, rather than ownership of, music. It is a reflection of how much we have adapted that digital revenues today are, for the first time, on a par with physical.
“The headline statistics of 2014 speak for themselves, with overall revenues still largely flat, down by 0.4 per cent. Music companies are charting a path to sustainable year-on-year growth. That path was never going to be straight, but we are making great strides along it, embracing new models, licensing, investing and improving consumer choice.”
The global recording industry is a portfolio business of different consumer channels and business models. This is underlined by the enduring nature of the physical format, still 46 per cent of the market, and the still substantial share of digital revenues (52%) accounted for by downloads. Physical sales still dominate in a number of key worldwide markets including France (57%), Germany (70%) and Japan (78%).
Within the physical business, vinyl sales continue to revive with revenues increasing 54.7 per cent and now accounting for 2 per cent of global revenues. This underlines the industry’s commitment to consumer choice and to delivering music to fans in the widest possible range of formats.
Elsewhere in the industry, performance rights income increased by 8.3 per cent and now accounts for 6 per cent of total industry revenues or US$948 million. Synchronisation revenues increased by 8.4 per cent in 2014 to represent 2 per cent of the market, with big gains in markets such as France (+46.6%), Germany (+30.4%) and Japan (+33.5%).
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ifpi digital music report, international federation of phonographic industry, digital music, recorded music business, record labels, record companies
