This is a real eye opener for anyone in the music industry. Indie Musicians, take heed of what the trends are telling you! ..
The global market for recorded music fell slightly in 2014 to $14.97 billion, down 0.4 percent from the year before, as sales of online music matched those of CDs and other physical formats for the first time, according to an annual industry report released on Tuesday.
Revenue from downloads and online streaming was $6.85 billion last year, up 7 percent from the year before and representing 46 percent of the industry’s total, according to the report by the International Federation of the Phonographic Industry, a trade group based in London. Slightly less than that amount, yet still about 46 percent of the total, were CDs and vinyl LPs, which generated $6.82 billion in revenue, according to the trade group.
The rest of the revenue last year, about $1.3 billion, came from the licensing of music to outlets like television and film. The federation accounts for the trade, or wholesale, value of music, as it is received by record labels and their distributors. The report does not include revenue for music publishers, which represent songwriters.
Over the last several years, the trade revenue for record labels around the world has remained relatively stable at between $15 billion and $16 billion, after years of rapid decline as record companies struggled to adjust to the online world. The industry’s peak was in 1999, when the federation recorded $26.6 billion in trade revenue.
The group’s report highlights the continuing rise of streaming music and the parallel decline of CDs and downloads. Subscription services like Spotify and Deezer accounted for $1.6 billion in trade revenue in 2014, up 39 percent from the year before, and have 41 million paying users around the world, up from 28 million in 2013. At the same time, downloads — not long ago the most important growth format in the business — were down 8 percent.
Yet the report also illustrated the varying ways in which this transformation has been playing out around the world. Some countries, like Sweden, are almost completely dominated by streaming: 92 percent of digital revenue there comes from streaming, while in Canada, where Spotify arrived late last year, the number is just 8 percent. And in several of the world’s biggest markets, a majority of sales are on physical formats like CDs: In Germany, for example, the number is 70 percent, and in Japan it is 78 percent.
This year is expected to be a highly competitive one for online services, as Spotify, which is now available in 58 countries, continues to raise hundreds of millions of dollars from investors. YouTube is introducing a paid tier called Music Key, and Apple is expected to unveil its own subscription service, after buying Beats last year for $3 billion. And Jay Z has already taken over Tidal, a streaming outlet that offers high-definition audio.
According to the report, the top-selling artist of 2014 around the world was Taylor Swift, although the best-selling album, with 10 million sales, was Disney’s “Frozen” soundtrack; Ms. Swift’s album, “1989,” sold six million copies globally.