DIGITAL MUSIC revenues rose 8 per cent in 2011 to $5.2 billion, but it was not enough to prevent another annual decline in the overall market to $16.2 billion from $16.7 billion in 2010.
Figures released yesterday by record industry body the International Federation of the Phonographic Industry (IFPI) confirmed expectations that a downward trend which began in the late 1990s continued last year.
The good news was that the 2011 decline of about 3 per cent was smaller than the 8 per cent drop in 2010, and there were signs the industry was finally beginning to get on top of the rampant online piracy it blames for its woes.
Record label bosses were cautiously optimistic that music revenues would finally return to growth in 2013, a view not shared by everyone in the business.
“The future is looking extremely bright. Has the industry turned a corner? I’m definitely more positive now than I’ve ever been,” said Rob Wells, president of global digital business at Universal Music Group.
Edgar Berger, president and chief executive (international) at Sony Music Entertainment, added: “I think the environment is changing favourably and we’re going from headwind to tailwind.”
Frances Moore, chief executive of the IFPI, said major legal digital music services spread dramatically last year to 58 countries from 23 in 2010.
She welcomed the arrival of new models for accessing music, including cloud-based services like iTunes Match, and said the number of subscribers to sites like Spotify and Deezer had jumped to 13.4 million from 8.2 million in 2010.
But despite signs that governments were taking the issue of piracy more seriously, it continued to undermine the recording industry’s efforts to return to growth. The IFPI estimated that 28 per cent of internet users accessed unauthorised services on a monthly basis.
Mr Wells said piracy’s significance could not be played down. “Spain, which should be the powerhouse of repertoire for Latin America and the US Latin market, is effectively a dead market,” he said.
The IFPI report came just days after the US government shut down the Megaupload.comcontent sharing website, the latest skirmish in the battle against the piracy of movies and music. Soon after, FileSonic, another website providing online data storage, disabled its file-sharing services.
The most popular digital single last year was Bruno Mars’s Just the Way You Are with 12.5 million downloads. – (Bloomberg)
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