As George Osborne smugly waves his red (yet definitively blue) budget briefcase around, The Gen returns to the slightly more predictable world of digital music sales stats. The IFPI has published its latest round of digital stats, revealing a 51% rise in subscription service revenues despite global recorded revenue dropping by 3.8%.
The International trade body this week published their ‘Digital Music Report 2014’, with increases reported in the UK alongside the other four biggest music markets in Europe- France, Italy, Germany and the Netherlands.
The report followed the sobering news that industry revenues in Japan had dropped by a dramatic 16.7% year on year. Commenting on the first European growth in 12 years, IFPI Chief Executive Frances Moore said: “Even accounting for the difficult situation in Japan, the global recording industry is in a positive phase of its development”.
Moore continued: “Revenues in most major markets have returned to growth. Streaming and subscription services are thriving. Consumers have a wider choice than ever before between different models and services. And digital music is moving into a clearly identifiable new phase as record companies, having licensed services across the world, now start to tap the enormous potential of emerging markets.”
Subscription based and ad-supported streams now account for 27% of overall revenues, almost doubling the percentage that they held in 2011, with an estimated 28 million people now paying for such services worldwide. However, physical formats, the perpetual punch line in such reports, still account for over half of all revenues (51.4% to be exact). All of which points to a global picture in which streaming is the slow moving savior of recorded industry revenues and the very definition of a long game.
Supporting this trend, the Entertainment Retailers Association (ERA) has reported that last year, physical media claimed 56.6% of the overall entertainment market in comparison to 43.4% from digital. Interestingly, subscription based streaming services claimed over a quarter (26%) of the market during this time. The figures include video game, film and TV streaming platforms such as Netflix alongside the likes of Spotify and Deezer.
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