Australia’s Record Biz Reports Growth In 2012

The Australian recorded music market – the world’s sixth biggest – had a growth year in 2012. The market enjoyed a 4% gain in value to Australian $398 million ($410 million) last year, its first annual improvement since 2009, according to new data published by trade body ARIA.

It was a year when digital made huge strides, and the dominant CD album format began to lose its lustre. “It is very pleasing to see the industry achieve growth in 2012,” notes ARIA Chairman and Sony Australia chairman and CEO Denis Handlin in a statement.

Digital revenues surged ahead by 31% compared with 2011 and the various formats are now worth a combined sum of Australian $184 million ($189 million). During a year in which all the big brands in streaming arrived on the scene – Spotify, Deezer and Rdio among them – its no surprise the streaming section of the market was a real bright spot. Revenue from ad-supported models grew by 88% to more than Australian $9 million ($9.2 million) and subscription models leapt 223% to $2.1 million ($2.2 million) in 2012. That business model is about to overtake the mobile master ringtone space, which has crumbled away to $2.77 million ($2.8 million), a year-on-year decline to the tune of 25%.

Digital tracks remain far-and-away the biggest money spinner out of all the non-physical categories, generating more than Australian $98 million ($101 million) in 2012, a gain of 23.5%. Australian consumers also went for digital albums in a big way last year. ARIA’s wholesale figures show digital albums spiked by 37.7% for a value of more than Australian $63 million ($65 million).

Australia is the lucky country. It swerved the worst of the global financial crisis and its dollar is at an all-time high. Its current luck has much to do with its positioning in the mining boom, a sector that is apparently outweighing weaknesses in manufacturing and a tricky general retail sector.  It’s an economically stable and technologically developed market, and its digital music industry should benefit as the government continues to uphold its promise to connect 90% of the vast country through the investment of more than Australian $37 billion ($38.6 billion) in the national broadband network.

Australia’s typical record buyer has always had a soft spot for CD albums. Until now, it would appear. The CD album format fell away by 13% in value last year to Australian $193 million ($198 million). Usually a buoyant part of the market, the CD album now accounts for less than half the value of the overall record biz here.  Music DVD and video formats slipped 4% to Australian $17.5 million ($18 million), while the relatively small vinyl sector reported gains in the singles and albums formats.

Australia’s digital market is now 46% of the entire pie. With some 30 digital music services currently operating Down Under, that figure will almost certainly hit 50% during the first half of 2013.