Global recorded music revenues fell by 3.9% to $15bn in 2013, despite income from subscription streaming services like Spotify and Deezer rising sharply.
Figures published today by music industry body the IFPI in its annual Digital Music Report indicate a bump back to earth for labels after a 0.3% rise in global revenues in 2012 – the first year of growth since 1999.
The IFPI blamed a sharp drop in Japan for 2013’s global decline, noting the impact of a 16.7% dip in sales in a country that accounts for more than a fifth of global revenues. If Japan is factored out, global sales dropped by just 0.1% in 2013.
Overall, physical music sales of CDs and vinyl fell by 11.7% to $7.73bn, while digital revenues rose 4.3% to $5.87bn. Within the latter sector, sales of downloads fell by 2.1% to $3.93bn while subscription streaming income rose 51% to $1.11bn.
Streaming’s first $1bn year is unlikely to dampen the industry debate about whether these services’ growth is making up for the decline of CDs, and seemingly now of download sales too.
The IFPI’s report strongly backs streaming, pointing to overall growth in 2013 in the US and the five largest European music markets: the UK, France, Germany, Italy and the Netherlands. “It is now clear that music streaming and subscription is a mainstream model for our business,” wrote IFPI chief executive Frances Moore in her introduction to the report.
“In 2011, there were eight million paying subscribers to subscription services — today there are 28 million. Ad-supported and subscription streams are rising in most markets, helping grow overall digital revenues for record companies and artists.”
European firms Spotify and Deezer may account for half of those 28m streaming subscribers. Deezer announced in November 2013 that it now had 5m paying subscribers, while label sources tell The Guardian that Spotify now has more than 9m, even though its public figure remains the 6m milestone announced in March 2013.
n the UK, 22% of internet users have used a subscription-based digital music service – including those using them for free – in the last six months according to research commissioned by the IFPI, compared to 33% using download stores.
The IFPI’s report quotes several executives from streaming music services banging the drum for the model, despite high-profile criticism in 2013 from artists including Thom Yorke and David Byrne, who fear it benefits major labels and established artists most, rather than emerging acts.
“This is the way people are consuming music, so the debate about whether it’s a model to embrace has been put to rest over the last year,” said Spotify’s chief content officer Ken Parks in the report.
“Subscribers are the best music customers we have. 120 dollars a year is substantially more than the average user spends on purchasing tracks,” added Zahavah Levine, Google’s director of global music partnerships for Android.
“Relative to the industry’s overall revenue, subscription revenue is still a small piece but it’s growing fast.”
The IFPI’s report also reveals that the top-selling album of 2013 globally was One Direction’s Midnight Memories, which sold 4m copies including physical and digital, beating Eminem’s The Marshall Mathers LP 2 (3.8m units) and Justin Timberlake’s The 20/20 Experience (3.6m).
The biggest single was Robin Thicke’s Blurred Lines, whose 14.8m units tracked by the IFPI includes single-track downloads and “track equivalent streams”. The track beat Macklemore & Ryan Lewis’ Thrift Shop (13.4m units) and Avicii’s Wake Me Up (11.1m)
