German Music Market Dips in First Half of 2014 as CD Format Continues to Dominate
The music market in Germany saw a 0.8 percent dip after a weaker performance in the first half of 2014. As the German Federal Music Industry Association (BVMI) reported today, revenues from physical and digital music sales totaled $656 million euros in the first six months of 2014 -- four million euros less than in the first half of 2013.
A look at the official German album charts shows that the trend towards German-language music continued in the first half of the year. Nine German artists are represented in the Top 10 album charts -- the highest proportion of German music in the history of the Top 10 album charts.
As for popularity, the year's best-selling artist is singer Helene Fischer with her Universal album Farbenspiel, which sold more than 1.5 million copies in the first half of 2014.
The CD format continues to be the key driver of revenue, again recording only a slight decrease (-3.6 percent). It continues to generate two-thirds (65.6 percent) of total revenues in the German music market. The segment with the highest growth was subscription-based and advertising-funded music streaming (+77 percent), which now accounts for 7.7 percent of the market. Vinyl also continues to be successful, growing by 34.5 percent compared to the first half of 2013, and increasing its market share to 2.4 percent. Sales of music videos, physical singles and cassettes continued their downward trend of recent years (-10.4 percent, -31.2 percent and -39.3 percent, respectively), with the cassette now no longer playing any role in the music scene after marking its 50th anniversary last year.
Revenues from digital businesses grew by 7.5 percent overall to 174 million euros. With a revenue share of 26.5 percent, digital sales accounted for more than a quarter of turnover in the German music industry. Even though revenues from downloads fell for the first time (down 7.1 percent) they remain the second most important source of cash in the German music industry, with a share of 18.6 percent.
"We're seeing a comparatively stable overall market development in Germany, with the CD continuing to play a decisive role," said BVMI managing director Dr. Florian Drücke. "Unlike in other countries, consumption of music in Germany is shifting to the digital world at a more moderate pace."
Frank Briegmann, president of Central Europe Universal and Deutsche Grammophon in Berlin, said to Billboard: "The music industry is the first content sector to have been able to monetize its content on a sustained and broad basis online. It provides a template for digitization and, as such, is now being regularly approached by other sectors seeking advice."
Against this backdrop, Briegmann says that he is optimistic about the future, stating that the focus is back on content, that demand is strong and that the ongoing technological advances are all for the benefit of the content industry.