There is no single way for recorded music markets to recover from their decline over the last decade. The digital-led growth seen in Sweden and Norway, driven by early and widespread adoption of subscription services, may look different in other countries.
On the back of digital growth, France's total recorded music revenues were down just 4.4% in 2012, according to year-end figures by trade association SNEP. But France, the home market of subscription service Deezer, does not appear to have a subscription-led success story like Sweden, Spotify's home market, or Norway. Subscription revenue accounted for 90% of Sweden's digital revenue and 56% of Norway's digital revenue in 2012. According to SNEP's figures, subscriptions accounted for just 28% of France's digital revenue last year.
France's story is typical in that digital gains struggled to offset physical losses. Digital revenues rose 13% to 125 million Euros last year. Most of that gain came from a 50.1% rise in subscription revenue to 33.8 million Euros. Digital downloads rose 11.8% to 63 million Euros. A small part of the digital gain, 3.2 million Euros, came from ad-supporting streaming.
Physical sales declined 11.9% to 363.7 million Euros. Rights revenue increased 13% to 101 million Euros.
Although France's market is somewhat stable due to rising downloads and subscription revenues, what's missing here is the dominant subscription market share seen in Sweden and Norway.
The amount of France's subscription revenue, 33.8 million Euros, implies the country either has a fair number of subscribers or has more subscribers and is getting less revenue for each one. At 6 Euros a month (roughly the labels' share of the a 10-Euro monthly fee), 33.8 million Euros annually works out to an average of just 469,000 subscribers. That seems a bit low considering France is Deezer's home market and Spotify operates there, too. If subscription services were getting far less revenue per user, say around 4 Euros, France would only have a more sizable 700,000 subscribers. (As a point of reference, Spotify and Deezer have about eight million subscribers between them.)
Aside from digital growth, another factor at play in France is the country's anti-piracy administration, Hadopi. SNEP offers evidence in its year-end figures that Hadopi has had a positive impact: monthly unique visitors to peer-to-peer sites decreased 35% from October 2009 to December 2012 and visits to cyberlockers dropped 27% in 2012, according to Nielsen. Those decreases could be the result of increased adoption of subscription services -- their executives have always boasted of the services' ability to act as an alternative to piracy -- as well as the result of copyright infringement notices sent by Hadopi.