The International Federation Of The Phonographic Industry (IFPI) has released its annual report, finding that digital music revenue is now on par with that of physical format sales for the first time ever, and that subscription services have become the cornerstone of the music portfolio business.
Although, as expected, global industry revenues are down — by 0.4%, to $US14.97 billion (about $19.29 billion) last year — digital revenues themselves are up 6.9% to $US6.9 billion, now occupying a 46% share of global music sales. As an extension of that rise, also up are subscription streaming-service revenues (+39%) and memberships (up by 46.4%, or to a total of about 41 million people), a lift also reflected in slightly decreased download sales (down 8%).
"The recorded music business has always led the way for creative industries in the digital world," IFPI chief executive Frances Moore said in a statement. "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."
In its report, IFPI explains that, with subscription services now representing 23% of the digital market and generating $US1.6 billion in trade revenue, the growing platform forms the "heart" of music industry's portfolio of businesses, and projects that it will undergo further growth as newer services such as YouTube Music Key, Jay Z's freshly launched TIDAL platform, and Apple's as-yet-unveiled contender are integrated into the market.
Physical formats are far from dead, however — they still occupy 46% of the global market, and enduringly dominate in key countries such as France (57%), Germany (70%) and Japan (78%) — while download revenues are still healthy in the face of rising subscription income, making up 52% of the digital market.
In other trends, worldwide vinyl sales are still strong, with the format's revival seeing revenues rise by 54.7% to constitute 2% of global revenue; performance rights income enjoyed an 8.3% bump; revenues from TV & movie synchronisation increased by 8.4%; and IFPI estimates that, although prevalent, internet user access to unlicensed services such as file-sharing clients is on the decline (down to 20% of users, from 23% in 2013).
You can read the full report about the state of the industry here.
