IFPI: Global record industry grew for first time in 13 years in 2012

Tom Pakinkis 02/26/13 Music Week

The global trade value of the recorded music grew for the first time since 1999 in 2012, according to the IFPI.
The landmark growth figure comes in the international trade body’s new Digital Music Report 2013, which states that the music industry grew by 0.3% in 2012 – the best result since 1998 “and a sign that the improvement in market conditions seen in 2011 has been sustained.”
The report also declares that digital revenues in 2012 reached $5.6 billion (up 9% on 2011), with digital now representing 34% of total market value.
Digital channels account for the majority of income in an increasing number of markets including India, Norway, Sweden and the US.
The IFPI also found that 62% of internet users now use licensed services to consume music, that the number of paying subscribers to music services has increased 44% and that download unit sales are up 12%.
Digital Music sales increased 12% in 2012 to 4.3 billion units globally – more than twice the pace of single tracks. There were 2.3 billion single track downloads in 2012 (up 8% on 2011) and 207 million digital album sales (up 17% on 2011).
Subscription services are described by the IFPI as a now “integral part of the recorded music market.” There were 20 million paying subscribers globally in 2012.
Moreover, subscriptions services are expected to have crossed the 10% mark as a share of total digital revenues in 2012 for the first time. In Europe the forecasted share is expected to be at a higher 20%.
The IFPI report flags up a number of exemplary territories as beneficiaries of the new digital surge, and ones that will be key players in the international music market of the future.
“We have plenty to do and some amazing opportunities ahead of us,” says Stu Bergen, executive vice president, International and head of Global Marketing, Recorded Music, Warner Music Group, in the report. “Until recently, the vast majority of our revenues came from a handful of countries. Today, digital channels mean we can monetise markets worldwide much more effectively.
Edgar Berger, president and CEO, International, Sony Music Entertainment adds, “We can see growth happening already from Brazil to Scandinavia, Canada to India. We think this is the start of a global growth story for the industry. “
The IFPI highlights a number of emerging markets, pointing out that, while at the start of 2011 the major international digital services were present in 23 markets, they are present in more than 100 today.
Digital sales are said to have taken off in 2012 following the launch of iTunes at the end of 2011 and revenues are expected to have nearly doubled in the past 12 months. Brazil’s music market has grown 8% in the last three years.
India is “nearing an all-time high” with its recorded music market growing for the third consecutive year in 2012 and digital sales overtaking physical.
Meanwhile, despite piracy being historically high in the Netherlands, where government is reluctant to intervene, the IFPI has tipped the territory for a Swedish style turnaround in the future thanks to the spread of licensed digital services.
The number of Dutch internet users using unlicensed services in January 2012 fell by 4% by December 2012 (from 6.6 million to 6.1 million), according to IFPI figures.
The Dutch market is estimated to have had the biggest digital growth among the major European markets in 2012 (up 52%). Although total sales are expected to have declined in 2012 due to falls in physical sales, the Netherlands “may soon bounce back to growth” as the digital share of the market grows, says the IFPI.
“This year’s Digital Music Report reflects the growing optimism felt across the music business internationally,” says IFPI CEO Frances Moore in the report. “We are on the path to recovery and driving the digital economy. These are hard-won achievements – we will be pushing to build on them in 2013.”

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