Is the music industry in steep decline, or growing steadily? Actually, it’s both. Worrying figures from markets like Japan and Spain should not be taken lightly, yet neither should the trend-bucking growth in the UK and Sweden.
Here’s something to chew over: some sample headlines from the Music Ally Bulletin this year. Nielsen reveals rise in US music purchases. Music sales up 10.2% in Sweden, says IFPI. Music survived economic crash better than games and DVDs. Digital albums growing fast in the UK. UMG revenues rose in Q3. UK recorded music trade income rose 1.4% in 2009.
That’s the good news. Here’s the bad – again, headlines from our Bulletin. Missing: 24 million music buyers. IFPI’s 2009 figures reveal 7.2% fall in global recorded music revenues. More bad news for the Japanese music industry. US digital album sales in ’sustained decline’. Report claims €5.2bn piracy loss in Spain for 1H10 alone. US download sales flatten. WMG suffers from digital slowdown.
The single overriding lesson is not to generalise about ‘the music industry’, when the differences are so marked geographically and according to sector. In the UK, for example, PRS for Music has shown that growing live revenues are helping to boost the overall music industry pie, despite the travails of the recorded music sector. Yet in the US, 2010 saw plenty of talk about the live industry’s problems – a trend that may or may not cross the Atlantic depending on who you talk to.
Some conclusions are hard to refute: the struggle of the Spanish music industry, the worrying signs of mobile slowdown in Japan, and the way digital recorded music sales growth is a.) still not making up for the decline in physical sales, and b.) showing signs of plateauing in certain markets. Yet again, the danger is in generalising too much: TuneCore boss Jeff Price just published a series of blog posts claiming that “More musicians are making money off their music now then at any point in history “ – an assertion not incompatible with the concerns discussed above.
Sweden remains the outlier – or perhaps the model for other markets to follow. That 10.2% revenue increase in 2009 was boosted by a 98.6% increase in digital revenues, accounting for 16.3% of all sales. Streaming grew from 17% of digital sales in 2008 to 46.1% in 2009. It rather went against the claims that streaming cannibalises legal sales more than it does piracy – especially given that music piracy is hardly an unknown phenomenon in Sweden, thanks to The Pirate Bay and the local Pirate Party. Sweden also had its IPRED legislation, of course, and remains perhaps the best evidence for suggestions that reducing illegal filesharing and growing music revenues requires a carrot and a stick.
Among artists, there were clear digital winners this year, judged by a variety of metrics. Lady Gaga reaching one billion YouTube views (with Justin Bieber hot on her heels); Black Eyed Peas and Kings of Leon breaking download records on either side of the Atlantic; The Beatles selling two million downloads in a matter of days when they eventually made it to iTunes. Even Eye of the Tiger topped one million downloads – we’ll let you be the judge of whether to rejoice about that.
The point is that there are plenty of reasons for optimism about digital music and the business models around it, just as there are lessons to learn from services that have failed, or markets where piracy has run rampant. This may be a time for bold action on both sides of the carrot/stick debate, but it is certainly no time to write the industry off."