Australia’s recorded music market suffered a double-digit slump in 2013 as digital finally replaced the CD as the top format, new data reveals.
Annual recorded music revenue in 2013 declined by 11.6% to Australian $351.6 million ($313 million), according to wholesale trade figures published by ARIA. It’s an ugly result for a market that was ranked No. 6 last year by the IFPI, and is recognized for a strong appetite for local repertoire and a fast-maturing digital music market.
The CD was the villain. The value of the top physical format diminished by a quarter, from Australian $193 million ($172 million) to Australian $141.7 million ($126 million). The Australian $50 million ($44 million)-plus lost in CD sales was enough to drag down the entire recorded music market.
The latest dip illustrates the up-and-down nature of Australia’s biz over the past five years. The result follows a 4% increase in the 2012 calendar year, the first growth the industry had experienced since 2009.
ARIA is philosophical about the figures. The “transitional” dip, the trade body notes, accompanies a swing toward digital music formats. For the first time, digital (54.7%) outpaced physical (45.3%) during the year. All digital formats combined for a total of Australian $192 million ($171 million) spend, up 4.3%. Most industry observers expected the shift to have happened in 2013, or 2012, but the new ARIA publication is the first hard evidence of that.
“The way that music is discovered and enjoyed by fans continues to evolve, and as the industry continues to transform itself, the sales trajectory will not always be a straight line,” comments ARIA CEO Dan Rosen. “We have seen in other territories around the world that as streaming services gain momentum, strong market growth has followed." It's an "exciting time," he notes, as "Australian music fans are consuming more music than ever before with an ever-expanding range of options to access music - whether it is streaming music, digital downloads or visiting the local record store.”
During 2013, revenue from streaming services almost doubled to Australian $20.9 million ($18.6 million), and the sector now accounts for 5.9% of the total market value. The data also reveals ad-supported revenue (Australian $12 million/$16 million) is still considerably greater than the sums generated by subscriptions (Australian $8 million/$7 million). At the same time, digital track revenue dipped by 3% and digital album spend grew by 7.88%.
The value of vinyl albums grew by almost 77% in 2013, but the sector accounts for less than $3 million value -- just a fraction of the overall market.
ARIA chairman Denis Handlin is confident 2014 will be “an extremely important year for our industry.” The ARIA report comes on the heels of the governor-general George Brandis’ pledge to support the creative industries with potentially tighter policies. Brandis hasn’t ruled out a particularly tough anti-piracy policies, and a “graduated response” system is under discussion.
“The value of the creative industries to the Australian economy will be in focus as the Federal Government considers the recommendations of the Australian Law Reform Commission’s inquiry into copyright and the digital economy,” notes Handlin, an entrant into the Billboard International Power Players list. “As our industry continues to embrace the digital landscape, it is increasingly important that we have the business and rights protection environment in place to support our local artists and record labels, which make such a valuable contribution to our country’s cultural identity and creative economy.”
Homegrown artists topped the ARIA albums chart on 14 occasions, a record, while the likes of Nick Cave & The Bad Seeds, Havana Brown, Guy Sebastian, Empire Of the Sun, Airbourne and Keith Urban enjoyed international success during the period.