Australian Recorded Music Market Down Slightly in 2011, Digital Surges
Australian Recorded Music Market Down Slightly in 2011, Digital Surges

Australia's digital music market is providing a huge shot in the arm to the country's recorded music industry, but the boost provided by new technologies and formats wasn't enough to spark the market into growth, new trade figures released by the Australian Recording Industry Association (ARIA) reveal.

The Australian record industry reported a slight down-tick in value to Australian $382.7 million ($411 million), just 0.34% below the corresponding 2010 figure.

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During the year, digital music formats saw growth of 34.4% in value, and the digital market is now worth Australian $140.5 million ($151 million).

"It's a good result," ARIA CEO Dan Rosen tells Billboard.biz. "It fills us with optimism that the Australian public is embracing digital. We've seen strong growth in digital. Physical is still making up two-thirds of the market. All in all, (the result) shows optimism and hopefully we can start moving back into 'positive' territory in the coming years."

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At the same time, shipments of CD albums fell by 11.89% to Australian $222.6 million ($239 million). CD albums account for 58% of all revenue. Overall, physical product dropped 13.8% to Australian $242 million ($260 million), and now accounts for 63% of the total revenue pie.

In its trade report, ARIA steers well away from spinning the results to create a glowing, healthy picture of the industry. The trade body explains that the industry's current value of Australian $382.7 million ($411 million) represents a drop of 27.5% on the Australian $528.2 million ($568 million) generated in 2005. The most recent result is about 14% below the Australian $446 million ($479 million) figure recorded in 2009.

The ARIA report, notes Rosen, was "an education process to say we're incredibly optimistic about the future and we've worked very hard as an industry to embrace technology. But let's not kid ourselves that we're still not losing an enormous amount of revenue to online piracy. There's a huge leakage of dollars which should be flowing back to the artists and the labels who invest in the artist that we're not seeing."

Citing figures recently issued in the IFPI's "Digital Music Report," ARIA explains that one in four Internet users access unauthorized services on a monthly basis.

Rosen adds, "We do definitely need assistance to stop people doing the wrong thing. This is a key message we wanted to get across."

If digital is seen as a "white knight", then 2012 is expected to be the year the cavalry arrives. Spotify, Songl, Deezer and MOG are all expected to launch here, while Rdio, RaRa and JB Hi Fi's "Now" are already in business.

Rdio launched recently in Australia, just the company's fourth market behind the U.S., Canada and Germany. "We looked at (the Australian) market and saw incredible opportunity," Rdio co-founder Carter Adamson tells Billboard.biz. "We saw early adopters, and we saw digital music revenues growing."

In a sign of the downward pressure on pricing Down Under, ARIA reported a 20.5% rise in the volume, to more than 98 million units.

ARIA says the industry is anticipating a number of big local releases in 2012 by the likes of Hilltop Hoods, Ladyhawke, Lisa Mitchell, Delta Goodrem, Guy Sebastian, Reece Mastin, Tame Impala, Empire of the Sun, Birds of Tokyo, Something For Kate, The Temper Trap, Sia and Parkway Drive (DVD), and a string of international releases from the likes of Usher, Bruce Springsteen, Muse, Linkin Park, Mumford and Sons, Madonna, Norah Jones and The Beach Boys.