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Australia's Record Biz Returns to Growth in 2015
Australia’s recorded music industry returned to growth in 2015 thanks to strong gains from the flourishing streaming business and a relatively painless decline in the still-powerful CD album format.
The overall record market Down Under grew by 5% in value last year to A$333.8 million ($252 million), ARIA reported Monday (April 11). It’s the first uptick for the domestic industry since the trade body shared annual wholesale figures for 2012.
Streaming services were the hero. In the 12-month reporting period to December 2015, streaming services generated growth of more than double to A$46 million ($34 million), a figure which accounts for revenues from subscription brands such as Apple Music, Deezer, Google Play, Guvera and Spotify and other non-subscription on-demand streaming operators including YouTube and Vevo. Ad-supported models almost performed well, generating A$24.8 million ($18.7 million), up 179% from the previous full-year period.
Although digital tracks and album downloads are becoming less attractive with Australian consumers, the strength of the streaming business means digital formats accounted for almost two-thirds of the total market by value last year.
The value of digital formats grew by 10.6% to A$207.6 million ($157 million), or 62% of the total pie, despite digital tracks and albums declining by 12.96% to A$131 million ($99 million).
Physical sales again deteriorated, though at a rate much less steep than in other years, while the vinyl format continues to surprise. All physical formats reported declines in January-December 2015, with the exception of vinyl, which grew to A$8.9 million ($6.8 million) in value, up 38%.
CD albums remain by far the most popular format. And with revenue at A$110 million ($82 million), just 4% or A$5 million ($3.7 million) less than the previous reporting period, the format accounts for about a third of the market.
“It is exciting to see our local industry return to growth in 2015,” comments Denis Handlin, ARIA chairman and chairman & CEO of Sony Music Entertainment Australia & New Zealand and president, Asia in a statement accompanying ARIA’s wholesale trade figures.
“The music business has continued to manage its way through times of challenge and transition. While the work with Government, ISPs and other service providers to ensure artists and record labels are properly rewarded for their creative efforts is far from over, Australian music fans are embracing the many legitimate platforms where an incredible range of local and international music is widely available.”
ARIA CEO Dan Rosen adds: “Australian music fans are consuming more music than ever before and did so across an unprecedented number of formats from streaming and downloading on mobile devices, to buying CDs and vinyl at local record stores.”
Australia’s digital marketplace, recognized by the IFPI as the sixth largest on the planet with, is undergoing an anticipated shakedown. Samsung recently announced its Milk Music would shut down, while leading bricks-and-mortar entertainment retailer last month closed its pioneering "Now" streaming service. Australia’s 23 million consumers have a dizzying array of choices for digital music platforms and observers suggest the “less is more” approach could be the right one.