According to IFPI’s Digital Music Report 2012, the digital music business saw unprecedented global expansion in 2011, now overtaking formats to become the primary source of revenues for record companies in the US. “As we enter 2012, there are good reasons for optimism in the world of digital music,” commented Frances Moore, CEO of IFPI. The report states that globally digital music revenue surpasses the film, newspaper and book sectors, and music subscriptions have risen dramatically.
With rapid expansion into new markets by services such as iTunes, Spotify and Deezer, the major international digital music services are now present in 58 countries, compared to only 23 at the start of 2011. Globally, 32% of music industry revenues come from digital sources, far surpassing the film, newspaper and book sectors. Global revenues to record companies grew by an estimated 8% to $5.2 billion in 2011. The number of users paying to subscribe to a music service leapt by 65% in 2011 to 13.4 million worldwide, and there is also strong consumer demand for both single track downloads (up 11% by volume) and digital albums (up 24% by volume).
Moore points out that inroads have been made into the fight against piracy: “Legal services with expanding audiences have reached across the globe and consumer choice has been revolutionized. Meanwhile momentum is building in the fight against piracy as governments and a growing circle of intermediaries engage with our industry.”
One example of success that the report cites is the introduction of the new Hadopi graduated response law in France. That has seen peer-to-peer (P2P) piracy levels decline by 26% , with around two million P2P users stopping the activity since warning notices were first sent out in October 2010, according to IFPI/Nielsen. A newly-published academic study finds evidence that iTunes singles sales in France were 23% higher than they would have been in the absence of Hadopi.
“Any complacency now, however, would be a great mistake,” Moore stressed. “Our digital business is progressing in spite of the environment in which it operates, not because of it. In 2012 the momentum needs to build further. We need legislation from governments with coordinated measures that deal with piracy effectively and in all its forms. We also need more cooperation from online intermediaries such as search engines and advertisers to support the legal digital music business.”
