Flat note, but music industry still upbeat

REVENUE for the global recorded music industry dropped 3.9% last year, and increasing numbers of fans listened to music on internet streaming and subscription services such as Deezer and Spotify.

The International Federation of the Phonographic Industry said this week that revenue for the industry, whose bestselling album was One Direction’s Midnight Memories, totalled $15-billion (about R160-billion). At the same time, revenue for internet subscription services soared 51%.

The federation, which represents music labels, said the European music market expanded for the first time in more than a decade. But revenues dropped 16.7% in Japan, the world’s second-largest music market, where sales of CDs are only now starting to decline and subscription services are working to establish themselves.

The news that digital revenue continued to grow was welcomed by an industry that has spent most of the past decade closing record shops and figuring out how to stem drops in CD sales.

“Even accounting for the difficult situation in Japan, the global recording industry is in a positive phase of its development,” said Frances Moore, CEO of the federation. “Revenues in most major markets have returned to growth. Streaming and subscription services are thriving.”

An estimated 28 million people now paid for music-streaming services, including Rdio, Spotify and Beats Music, which along with advert-supported streams accounted for 27% of digital revenue, the federation said.

Downloads made up two-thirds of all digital sales and were helping to drive growth in developing markets such as Hong Kong, Slovakia and South Africa, the group said.

It estimates that some 26% of internet users still regularly access unlicensed music services and said piracy remained the biggest threat to the development of legitimate services and investment in artists.

One Direction sold four million copies of Midnight Memories last year, followed by Eminem’s The Marshal Mathers LP2 and Justin Timberlake’s The 20/20 Experience.

The bestselling single last year was Robin Thicke’s Blurred Lines, followed by Macklemore & Ryan Lewis with Thrift Shop and Avicii with Wake Me Up. — Bloomberg