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Global Digital Revenues Have Overtaken Physical Income For The First Time Ever

Staff Writer

Digital now contributes nearly nearly half of all revenue for the global industry

The positive impact of streaming on the music industry is not just limited to Australia — in fact, the nascent music-consumption medium has had a palpable impact on global revenues as digital formats eclipse physical income for the first time in history, as revealed in this year's IFPI Global Music Report.

The unprecedented result — which comes off the back of an overall 3.2 per cent spike in global growth — sees digital revenues contributing a significant 45 per cent of industry income, overtaking the 39 per cent held by physical formats.

That shift is the result of a 10.2 per cent rise in digital revenues to $US6.7 billion (about $8.7 billion), including a 45.2 increase from streaming revenue, helping to mitigate the losses incurred by the declining popularity of downloads and physically released music. Ultimately, the 3.2 per cent bump for total industry revenue represents growth of $US15 billion, the first significant year-on-year result in almost 20 years.

However, the people behind the statistics are cautious in their celebrations, with IFPI chief executive Frances Moore noting in a statement that there is a widening "value gap" between the meteoric uptake in music consumption and the remuneration being afforded to artists and industry.

“After two decades of almost uninterrupted decline, 2015 witnessed key milestones for recorded music:  measurable revenue growth globally; consumption of music exploding everywhere; and digital revenues overtaking income from physical formats for the first time," Moore said. "They reflect an industry that has adapted to the digital age and emerged stronger and smarter.

"This should be great news for music creators, investors and consumers. But there is good reason why the celebrations are muted: it is simply that the revenues, vital in funding future investment, are not being fairly returned to rights holders. 

"The message is clear and it comes from a united music community: the value gap is the biggest constraint to revenue growth for artists, record labels and all music rights holders. Change is needed - and it is to policy makers that the music sector looks to effect change."

To read more about the IFPI Global Music Report, head to the organisation's website.