Labels tune into growth as new services lift off

Adele
Adele

MUSIC streaming services and growth in emerging markets were responsible for the first rise in music sales for 13 years in 2012, while physical sales and spending in western nations declined.

Figures from the International Federation of the Phonographic Industry (IFPI), the recording industry’s global trade body, yesterday revealed that subscription and advertising-supported music services such as Spotify were the key drivers of growth in 2012.

Performance rights sales, which include licensing for radio, TV music channels and nightclubs, also grew, as did sales of rights for use in adverts and films – known as synchronisation deals.

Music revenues rise on digital growth

The rise of these non-traditional formats made up for declining CD sales for the first time, with global recorded music revenues up 0.2 per cent to $16.48bn (£10.8bn). The figures will come as a boost to artists and record labels, showing that after years of declines, new services are finally offsetting slumping CD sales. The last time total revenues rose, in 1999, physical sales peaked, hitting $27.6bn.

Last year, digital, performance rights and synchronisation revenues made up 43 per cent of income, in stark contrast to 13 years previously, when non-physical sales were negligible. Subscription-based and advertising-supported services accounted for a fifth of digital sales, up from nine per cent in 2009.

The IFPI said that economies such as China and India, where revenues increased by nine per cent and 21.6 per cent respectively, made up for declines in the US and Europe. Sales in the UK fell 6.1 per cent last year, although it overtook Germany to become the world’s third-biggest market behind Japan and the US.

Despite the rise of non-traditional revenue streams, CDs and downloads remain dominant. Physical sales still account for 57 per cent of all revenues, while downloads are 71 per cent of all digital sales.

2012 also saw a resurgence in vinyl sales, which rose 50 per cent to 12m – their highest level since 2000.

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