Time for a party: global music sales are on the rise again
Yesterday’s report from the International Federation of the Phonographic Industry shows music sales have increased for the first time since 1999
Blow up the balloons! Get the ticker-tape parade ready! Buy some funny hats! Get the champagne out and ask the caterers to prepare some fancy canapes! The report from the International Federation of the Phonographic Industry yesterday carried the good news that global music sales are up for the first time since 1999. Brothers and sisters, the great music business recession is OVER!
Of course, the miniscule year-on-year rise (0.3 per cent) in income doesn’t exactly amount to a huge hill of beans and the overall revenue take of $16.5 billion looks puny alongside the $38 billion banked back in 1999. But given the doom and gloom which usually accompanies music business analysis stories, this one is worth marking. And remember we’re not in 1999 anymore, as the ongoing closure of the unprofitable and unsustainable big box bricks-and-mortar retail sector demonstrates.
What it comes down to is that the industry has finally copped on that it has to move fast in future. The dithering which defined the industry’s approach to iTunes and downloading in the wake of Napster at the beginning of the last decade just doesn’t happen on the same scale anymore because it simply can’t or the industry will disappear. Remember that period of a couple of years post-Napster and pre-iTunes when you couldn’t legally purchase an online download due to industry procrastination? With hindsight, we know the industry were idiots but, at the time, many of us were saying the same thing. And, of course, a deal was then done with Steve Jobs and Apple which turned out to be a lobsided one, leaving the tech giant the king of the world for a while. Another stupid mistake.
Looking at how the industry has dealt with the streaming services currently in vogue (note use of the term “current” – I don’t think streaming is going to be the final iteration in the evolution of how we listen to and access music) and how it didn’t leap in to save a failed business like HMV, it’s clear that lessons have been learned. Whatever about the shock-horror stories about income from Spotify et al (and there is more shock-horror to come, no doubt), it’s clear that income is coming in from new sources and that it is on the rise. Anecdotal evidence from labels shows that streaming income is increasingly becoming an important part of their overall revenue pie, as subscribers to these services continues to grow. In 2011, the number of subscribers increased by 44 per cent to 20 million and that number can be expected to grow further in 2013 and future years. Physical sales? They’re still there, but the industry knows they won’t be around forever so they’re moving on.
It’s also clear from scanning the report that the music industry are successfully searching high and low for digital revenue. Downloads are still a source of cash, while sync income also continues to be healthy. It would be interesting to get a breakdown as well of revenue earned last year from previous years, as labels start to send their business department bean-counters on the hunt for money down the back of various sofas which was never previously chased up (ie foreign earnings etc).
If the music industry wants an even bigger reason to party, imagine the take if they added live revenue to these figures. We know from various Billboard and Pollstar tallies that superstar acts are still flogging millions of tickets worldwide so the grosses from these tours also amount to a pretty penny.
Of course, the industry likes to put on the poor mouth when it suits them – and boy, has it suited them over the last decade to moan and crib about everything from piracy to freeloaders – but the truth is, as we can see from yesterday’s report, that the industry worldwide is in fairly rude health. Yes, there will be pockets which show a different gloss – the report notes problems in some emerging countries like China where digital services are struggling to gain a foothold due to piracy – but the overall music business has no reason for complaint right now. Something to note the next time IRMA start to whinge about their lot in life.
The trick now is for the industry to keep sucking diesel. The cull of executives and decision-makers who guided the industry into the mess it found itself in the last decade should continue apace and more room should be made at the top for those with bright, innovative, disruptive ideas no matter where they come from or what prior experience they’ve had. You could muse about what would have happened had the industry carried out this talent re-evaluation in the late Nineties, as many suggested at the time, but that’s a little pointless given that it wasn’t actually done and we all know now how that turned out. The truth is that the industry made a hash of things and is only now regaining a sure footing. Let’s hope the egos and arrogance which held sway back then are also something well and truly relegated to the past. Now, who wants a mushroom vol-au-vent?