World Music Sales Fell in 2013

Statistics published today by the IFPI reveal that music labels are again in trouble after a 0.3% rise in2012, the first year of growth since 1999.Last year, global recorded music revenues fell by 3.9% to $15bn, even despite income from subscription streaming services rising sharply.

The IFPI blames a sharp drop in Japan for the decline, as the country showed a 17% dip in sales while accounting for over 20% of global revenues. If you factored Japan out, global sales could have been almost stable in 2013.The figures reveal that physical music sales of CDs and vinyl dropped by 12%, while digital revenues increased 4%. There, sales of downloads fell by 2% while subscription streaming income increased 50%. The experts point out that streaming’s first $1bn year is unlikely to dampen the debate about whether this growth is making up for the decline of CDs, and of download sales as well.

In the meantime, the IFPI’s report strongly backs streaming, emphasizing overall growth in the US and 5 largest European music markets: Britain, Germany,France, Italy and the Netherlands. While there were 8 million paying subscribers to subscription services in 2011, today there are 28 million. It is clear that ad-supported and subscription streams are rising in most markets.

Streaming services like Spotify and Deezer may account for 50% of those 28 million streaming subscribers. For instance,Deezer announced 4 months ago that it had 5 million paying subscribers, while Spotify had over 9 million.The report quoted executives from streaming music services appreciating the model, despite criticism from musicians including Thom Yorke and David Byrne, who fear it would only benefit major labels and established artists most.

The report also revealed the top-selling album of 2013: One Direction’s Midnight Memories. It sold 4 million copies, both physical and digital. The second place was taken by Eminem’s The Marshall Mathers LP 2 (3.8 million copies), and the third line is hold by Justin Timber lake’s The 20/20 Experience (3.6 million)Strong digital growth in emerging markets was noted, including Argentina (digital revenues increased 69% in 2013), Peru (up 149%) and South Africa (up 107%).

Talking about piracy, the IFPI’s report claimed that 61% of people have used a licensed music service in the last 6 months, compared to 26% who access unlicensed services. However, piracy is still called an “overriding obstacle to market development in most emerging markets”. The music groups point out that they are focused on creating a fair playing field, supported by strong laws and effective enforcement.

This is why the report calls for more action including Internet service providers blocking access to piracy websites; search engines demoting such services in their ranking algorithms; and for codes of conduct to ensure ads aren’t placed on infringing websites.Still, the report is focused on the benefits provided by legitimate music services – streams, downloads or both.