MUMBAI: The recently published IFPI’s Digital Music Report showed a growth in terms of revenue, in the European music industry after 12 years. The report also indicated growth in the top five markets- France, Germany, Italy, Netherlands and the UK.
The report further stated that the US recorded music market grew by 0.8 per cent in trade revenues with strong demand for streaming services. This growth portrays the stability of the US market. However, Latin America saw a 1.4 per cent growth which was strengthened by digital sales. This year’s global growth of 4.3 per cent was driven by a diverse range of licensed music services. Subscription services and streaming was largely responsible for the rise in revenues by 51 per cent in 2013 which helped the business to cross US $1 billion threshold for the first time. Overall, global music trade revenues fell by 3.9 per cent to US $15 billion in 2013. The result was heavily influenced by a 16.7 per cent fall in Japan, which accounts for more than a fifth of global revenues.
Without accounting for the Japanese market, the overall global recorded music market was broadly flat, declining in value by 0.1 per cent. According to the report, music subscription is creating an impact in Denmark and Netherlands.
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Record companies continue to license many new services. The industry hopes and expects these services to spread quickly around the world. There are around 450 licensed services internationally, including global services such as Spotify, Deezer, Google Play and regional services such as Muve in the US and Asia’s KKBOX. IFPI chief executive Frances Moore said, “Streaming and subscription services are thriving. Consumers have a wider choice than ever before between different models and services. And digital music is moving into a clearly identifiable new phase as record companies, having licensed services across the world, now start to tap the enormous potential of emerging markets.” The key theme of the IFPI’s report was the potential of emerging markets following the expansion of licensed digital services in the last three years. Markets posting significant increases in digital revenue included Argentina, Peru, South Africa and Venezuela.
Although global physical sales value declined by 11.7 per cent in 2013, major markets including Germany, Italy, the UK and the US saw a slow decline of physical sales. “Physical sales experienced an overall drop of 11.7 per cent to
$7.73 billion, but still accounted for 51.4 per cent of global revenues with France even registering a slight uptick. These formats continue to challenge obviously premature reports of their extinction, a sign that demand for music is still incredibly strong, and point toward a profitable future in which all formats can find their own niche,” added Music Business Association president James Donio.
According to the report of RIAA, in 2013, strong growth in streaming revenues contributed to a US music industry that was stable overall at $7 billion for the fourth consecutive year. Paid subscription services growth came not just in dollars, but in the number of subscribers as well, with the annual average totalling over 6 million subscriptions.
Donio added, “Both the IFPI and RIAA reports paint an encouraging picture of an industry working through a dramatic transition, with new channels for music consumption rising up to balance the declines in other areas. With the average number of US customers who paid for streaming subscriptions nearly doubling to 6.1 million this year, it is likely these services will fuel more significant revenue increases down the road.”
