Trade revenue generated by the global recorded music industry in 2011 dropped by 3% to $16.6 billion, according to the International Federation of the Phonographic Industry's (IFPI) annual "Recording Industry in Numbers" report, published today (March 26).

Despite the continued year-on-year decline in trade revenue, last year's sales figures represent a significant slowing in the fall of the market, according to IFPI, who for the first time include synchronization revenues in its annual report.

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The inclusion of global sync revenues, which amount to $342 million in 2011, pushed global record music sales well above 2010's published total of $15.9 billion, as stated in IFPI's "Recording Industry in Numbers" 2011 report.

If you were to remove synchronization revenues from the equation, global recorded music sales in 2011 totaled $16.3 billion, down 3% from $16.8 billion in 2010. IFPI attributes the numerical difference between its previously published 2010 sales total ($15.9 billion, without sync revenue) to that stated in this year's report ($16.8 billion, without sync revenue) to the fact that it calculates growth on a fixed U.S. dollar basis, which means that U.S. dollar values have been restated at 2011 exchange rates. In addition, there may be minor revisions/restatements for 2010 from individual markets, according to a spokesperson for IFPI.

IFPI's study also states that physical format sales slumped by 8.7% globally, falling from a trade value of $11.1 billion in 2010 to $10.2 billion in 2011. The comparative fall from 2009 to 2010 was 13.8%. Meanwhile, global digital revenues saw growth of 8.0%, rising from $4.84 billion in 2010 to $5.23 billion last year, crossing the $5 billion mark for the first time. Digital now accounts for 31% of overall recorded music revenues, up from 29% in 2010, according to IFPI.

Global performance rights revenues also grew, climbing 4.9% globally, to $905 million (up from $862 million in 2010). The sector now accounts for 6% of overall revenues, while synchronization earnings grew by 5.7% in 2011 (totaling $342 million, up from $324 million the previous year) and accounted for 2% of global recorded music revenue.

In the global rankings, the U.S. retained the top position with sales remaining flat in value terms totlling $4.37 billion. Japan, the second biggest global music market, recorded a 7% decline in trade revenues, falling from to $4.39 billion in 2010 to $4.09 billion.

Germany is once again has the world's number three music market, posting flat results, with revenues totaling $1.47 billion in 2011. The United Kingdom, which slipped behind Germany in last year's world rankings last year, remains at number four, with recorded music revenues totaling $1.43 billion, a 3.1% fall on 2010's total of $1.48 billion. France is at number five with recorded music sales totally just over $1 billion.

Elsewhere in the top ten music markets, Australia ($475 million) has overtaken Canada ($434 million) to claim the number six spot and Brazil ($262 million) has jumped two places to number eight, overtaking the Netherlands ($240 million) and Italy ($240 million).

In total, 17 global markets saw growth in 2011, including seven of the top twenty markets: Canada (+2.6%), Sweden (+3.0%), India (+6.2%), South Korea (+6.4%), Brazil (+8.6%), Mexico (+5.5%) and Australia (+5.7%).

In the performance rights sector, the U.S. overtook the U.K. to become the leading performance rights market it the world, posting a 45.9% increase in revenues to record companies in 2011. U.S. performance rights revenue totaled $131 million in 2011, up from $90 million in 2010. IFPI cites increased adoption of digital and online broadcast services such as Pandora, SiriusXM, cable TV and internet streaming services, as well as the efforts of U.S. performance rights music licensing company SoundExchange, in driving growth. In the sync sector, the U.S. accounts for over half of all revenues with sync revenue last year totaling $187 million (up from $181 million the previous year).

Reflecting on the report, IFPI chief executive Frances Moore, said in a statement: "Music today is delivered through an unprecedented variety of channels. At the same time, record companies have expanded their operations into new markets and broadened their skill set and the services they offer to artists. More than at any time in its history, diversification is the byword for the recording industry today."

"2011 was a significant year in the evolution of the digital music business," commented Edgar Berger, President and CEO, International, Sony Music Entertainment, in a statement also included in the report. "The rollout of legal services to new markets, the continued expansion of subscription services and the revolution in portability have all contributed to the accelerated growth of the digital music market. The outlook is bright," Berger went on to say.

Also included in the report was a run-down of 2011's best-selling global albums, which was unsurprisingly topped by Adele's "21" (XL Recordings/Columbia), moving 18.1 million units worldwide, according to IFPI, making it the best-selling album of the past decade. Michael Bublé's "Christmas" (Warner Music) was the second best-selling album of last year, with Lady Gaga's "Born This Way" (Universal) at number three, although sales figures were not provided.

Bruno Mars held two of the global best-selling digital songs of 2011 with the artist's "Just The Way You Are" and "Grenade" (Warner Music) moving 12.5 million units and 10.2 million units respectively. LMFAO's "Party Rock Anthem" (Universal) was the third most popular global digital song, moving 9.7 million units.