February 26, 2013 at 10:27 am

Why Music Revenue Is Rising for the First Time Since 1999

ifpi_report_2013

According to the latest numbers from the International Federation of the Phonographic Industry (IFPI), global music revenue rose 0.3 percent to $16.5 billion in 2013, reversing 12 straight years of declines (.pdf).

Apparently, where music is concerned, 13 is a lucky number.

“At the beginning of the digital revolution it was common to say that digital was killing music,” Sony Music Entertainment international chief executive Edgar Berger told the New York Times. “The reality is that digital is saving music.”

The Times credits the following factors for this increase:

  • Digital music sales (a.k.a. iTunes, Amazon, etc.) are rising.
  • Subscription fees (Rdio, Spotify, Rhapsody, Muve, Deezer, etc.) are “growing rapidly.” This is hardly surprising, because many of the numbers people are complaining about are old, but it’s obviously good news — and it should even improve our actual culture, for real.
  • Licensing revenue (i.e. to film, advertisements, videogames, YouTube, etc.) is also “growing rapidly.”

“We can see growth happening already from Brazil to Scandinavia, Canada to India,” said Berger within the report. “We think this is the start of a global growth story for the industry.”

The Times doesn’t mention that apps running on Spotify’s and Rdio’s APIs are also contributing to these fees, but they’re helping. Users of Spotify’s third-party desktop apps listened to 1,500 years of music in the first three months they were available, and Spotify has to pay for every second. That effect will likely become more pronounced as these apps move beyond the desktop and become commercialized, attracting more developers and brands.

Ultimately, though, it’s all about multiple sources of revenue in the digital age. This digital-driven turnaround will not propel the music industry to its old heights ($38 billion per year) overnight. But for anyone even tangentially involved in music — and the much larger group of people consisting of music fans — this is good news no matter how you slice it.

(NYT via Debbie Newman; image courtesy of IFPI)

  • http://www.facebook.com/iamschoolcraft Thomas Schoolcraft

    Spotify doesn’t help artists though- they pay probably like 1/100th of a cent per stream on Spotify. But while they do that, they make 10 dollars a month from each Pro subscriber, and make money from the free users watching advertisements. So what this means is that corporations are making the money, while small labels and artists are still going to be broke. Let’s rejoice.