Global revenue from digital sales and services grew by 8 percent in 2011 - up from 5 percent the previous year - while the overall recorded music market shrank by approximately 3 percent in total trade value (both physical and digital), according to IFPI's annual Digital Music Report.
The report, which was unveiled today at IFPI's London offices, placed the total trade value of the global digital music market in 2011 at $5.2 billion, up from $4.8 billion the previous year, and accounted 32 percent of record companies' total income, up from 29 percent in 2010.
The growth in revenue derived from digital services contributed to a slowing decline in the overall music market, says IFPI. The international music organization said that the total trade value of the recorded music market was $16.2 billion dollars, down from $16.7 billion in 2010. That amounts to a 3 percent fall in total trade value, compared to an 8-9 percent slip in 2010.
This year's report also stated that:
An estimated 3.6 billion downloads were purchased globally in 2011(combining singles and albums downloads), a year-on-year increase of 17 percent.
More than half of record company revenue in the U.S. now derives from online services, with digital accounting for 52 percent of record company revenue. South Korea has also tipped over the 50 percent marker, with digital accounting for 53 percent of its recorded music revenue. In China 71 percent of record company revenues came from digital sources.
Digital album volume sales grew by an estimated 24 percent globally in 2011.
In the U.S., digital album volume sales grew by 19 percent. In the U.K. they grew by 27 percent, while France, which has introduced Hadopi graduated response anti-piracy legislation, experienced 71 percent growth in digital album volume sales.
The global number of paying subscribers for music services leapt by 65 percent, from 8.2 million in 2010 to over 13.4 million in 2011, according to IFPI estimates.
Single track download sales in the U.S. climbed 8 percent in volume. In the U.K., single track downloads were up 10 percent; France 23 percent.
The 8 percent rise in digital revenues was the first year-on-year growth since IFPI began measuring digital revenues in 2004.
Bruno Mars' "Just The Way You Are" was the top-selling single of 2011, selling more than 12.5 million copies globally. Bruno Mars also scored the second top-selling single of last year with "Grenade" selling 10.2 million units. LMFAO's "Party Rock Anthem" was No. 3, moving 9.7 million globally.
"As we enter 2012, there are good reasons for optimism in the world of digital music," said Frances Moore, chief executive, IFPI, in a statement. "Legal services with expanding audiences have reached across the globe and consumer choice has been revolutionized. Meanwhile momentum is building in the fight against piracy as governments and a growing circle of intermediaries engage with our industry."
"Any complacency now, however, would be a great mistake," Moore continued. "Our digital business is progressing in spite of the environment in which it operates, not because of it. In 2012 the momentum needs to build further. We need legislation from governments with coordinated measures that deal with piracy effectively and in all its forms. We also need more cooperation from online intermediaries such as search engines and advertisers to support the legal digital music business."
Present at the report's launch was Rob Wells, president, global digital business, Universal Music Group, who declared that "2012 is going to be quite a significant year in the history of the music industry."
"What we are seeing is significant progress, new services and new models and modes of consumption being embraced by consumer groups," he went on to say. "As these services mature they [will begin] to come with ISP subscriptions or [bundled] subscriptions, which is where we start to see real scale [of growth]. So the future is looking extremely bright. "Has the industry turned a corner? Only time will tell but I'm definitely more positive now than I have ever been."