Recorded music industry turns a corner


Digital Downloads
Total sales of recorded music increased in 2012, and although the percentage by itself is rather unimpressive, it marks the first time such a number has been written in black ink since 1999. The growth was driven by digital.

According to the International Federation of the Phonographic Industry, the industry gained 0.3% on a global basis to $16.5B in US dollars. A 9% gain in digital revenue to $5.6B was the primary driver of the move into the black. Sales of downloaded music were said to be up 12%.

Income from licensed downloads, as well as subscription fees and advertising income from legal music sites were all contributors to the 2012 success story.

Frances Moore, chief executive of IFPI said: “It is hard to remember a year for the recording industry that has begun with such a palpable buzz in the air. These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade. They show how the music industry has adapted to the internet world, learned how to meet the needs of consumers and monetised the digital marketplace.”

Unfair competition from unlicensed sites was spotlighted as the industry’s biggest problem – and it added that government intervention was needed to help put it down. IFPI also asked for “…effective cooperation from intermediaries including advertisers, ISPs and search engines, who have a major influence on levels of copyright infringement.”

RBR-TVBR observation: Good to know that the main impediment to further robust growth has nothing to do with US radio and the lack of a performance royalty – indeed, broadcasters continue to help boost the sale of recorded music via what amounts to free advertising each and every time a tune is played on the air.
No, the impediment is the same one that got the recording industry in trouble in the first place – illegal downloads.

Perhaps now that recording companies have at least stanched the bleeding, they will focus more on that core problem and less on wringing a few dollars out of the radio industry. We look forward to the day when the two businesses get back to working in partnership for their common good rather than bickering over peanuts while the recording industry’s big issue looms not on the airwaves but in the internet.