FACTS, FIGURESAND TRENDSThe music business continues to expand into new marketsand create new business models, attracting more usersto digital music services and bringing artists to a widerglobal audience.The industry’s digital revenues grew by 4.3 per cent in 2013 toUS$5.9 billion. There was steep growth in both revenues and usernumbers for subscription services, continued revenue growth fromad-supported services and stable income from download sales inmost markets. Globally, digital now accounts for 39 per cent of totalindustry global revenues and in three of the world’s top 10 markets,digital channels account for the majority of revenues.Overall, recorded music revenues grew in Europe and LatinAmerica and continued to stabilise in the US, growing 0.8 per centin trade terms¹. <strong>Music</strong> sales on a global scale, however, were sharplyinfluenced by a steep 16.7 per cent fall in Japan, the world’s secondlargest market. Outside Japan, global music revenues were down0.1 per cent; including Japan, they fell 3.9 per cent to an estimatedUS$15 billion.1. US recorded music sales are reported in retail terms in the US while IFPI’s globalfigures are reported in terms of trade value. US revenues declined 0.5% in retail valueUS$5.9Bnthe industry’sdigital revenues in 201339%the proportion of theindustry’s revenues fromdigital channelsFigure 1: Global digital revenues 2008 –13 (US$ Billions)5.65.14.44.64.05.9Pharrell Williams photo by Mimi Valdes200820092010201120122013Source: IFPI6
Streaming and subscriptions surgeSubscription services, part of an increasingly diverse mix ofindustry revenue streams, are going from strength to strength.Revenues from music subscription services — including freeto-consumerand paid-for tiers — grew by 51.3 per cent in 2013,exceeding US$1 billion for the first time and growing consistentlyacross all major markets.Global brands such as Deezer and Spotify are reaping thebenefits of geographical expansion, while regional servicessuch as Rdio, KKBOX and WiMP continue to attract new users.New entrants including Beats <strong>Music</strong> and YouTube launched, orannounced plans to launch, subscription services in early <strong>2014</strong>.The subscription model is leading to more payment for musicby consumers, many of whom appear to be shifting from pirateservices to a licensed music environment that pays artists andrights holders. The number of paying subscribers to subscriptionservices rose to 28 million in 2013, up 40 per cent on 2012 andup from only eight million in 2010.“<strong>Music</strong> has always been at the forefrontof the digital revolution, leading the wayfor other creative industries and definingthe future of digital entertainment. Todaymusic’s digital revolution is moving tothe next phase as consumers embracestreaming and subscription models inmarkets around the world.”— Edgar Berger, Chairman and CEO, International,Sony <strong>Music</strong> EntertainmentRevenues from advertising-supported streaming services,such as YouTube and Vevo, are also growing — up 17.6 per centin 2013. <strong>Music</strong> video revenues in particular increased as theindustry extended the monetisation of YouTube to more than50 countries, adding 13 territories in 2013. Vevo has performedstrongly, hitting 5.5 billion monthly views in December 2013, a46 per cent year-on-year increase, and attracting 243 millionunique viewers worldwide.Record companies have adapted their business to a modelincreasingly based on access to music, and not only ownershipof music. This reflects in the growing share of subscription andstreaming revenues as a percentage of digital revenues globally.The industry now derives 27 per cent of its digital revenues fromsubscription and ad-supported streaming services, up from14 per cent in 2011.The digital download model remains a key revenue stream,however. Downloads still account for a substantial two-thirds ofdigital revenues (67 per cent) and are helping to propel digitalgrowth in certain developing markets such as South Africa, HongKong, Philippines and Slovakia. Downloads have seen a slightdecline in overall value globally, although digital album sales remainon an upward curve as consumers still show strong demand forowning the album format. Revenues from downloads globallyfell slightly by 2.1 per cent in value, the decline being offset byincreases in streaming and subscription revenue to generateoverall digital revenue growth in the majority of markets.Revenue from performance rights — generated frombroadcast, internet radio stations and venues — saw stronggrowth. Performance rights income was us$1.1 billion globally in2013, increasing by an estimated 19 per cent in 2013, more thandouble the growth rate in 2012, and accounting for 7.4 per centof total record industry revenue.Income from synchronisation deals, in which music is placedin advertisements, films or television programmes, declined by3.4 per cent in 2013, and now accounts for 2.1 per cent of totalindustry revenue.Despite the overall transition to digital, physical music salesstill account for a major proportion of industry revenues in manymajor markets. Gifting and deluxe box sets remain popular whilevinyl continues to grow as a niche product. Physical formatsaccount for more than half (51.4 per cent) of all global revenues,compared to 56.1 per cent in 2012. Although global physical salesvalue declined by 11.7 per cent in 2013, major markets includingGermany, Italy, the UK and the US saw a slow-down in the rate ofphysical decline. France’s physical sales increased by 0.8 per cent,helped by a local repertoire boom which saw French repertoireaccounting for 17 of the French top 20 albums of 2013.While vinyl sales account for only a small fraction of theoverall industry revenues, they have seen an increase in recentyears in some key markets. In the US, vinyl sales increased by32 per cent in 2013 (Nielsen Soundscan), and in the UK, theyincreased by 101 per cent in 2013 (BPI).51.3% 28mincrease in subscriptionstreaming revenuespaying users ofsubscription services7
Change language