The German record industry estimates that in 2011 it will come out of its sales decline, after more than 10 years, and be able to report sales increases again for the market.
There is even hope in Germany that with the figures for 2009 the British record industry can be pushed from position three of the IFPI rankings of the worldwide record industry by the German business (the U.S. is No. 1, Japan is No.2 ).
The official BPI U.K. figures have not been released yet, although the Entertainment Retailers Association has just given a market value for music sales of £1.31 billion ($1.96 billion or €1.47 billion) in Britain. IFPI figures also include performance rights income and the U.K. was No. 1 in the 2008 figures, ahead of Germany at No. 2.
"While worldwide nearly all countries have to struggle with two-digit decreases in turnover the income from the sales [of recorded music sales] in Germany in 2009 only went down 3.3% to €1.53 billion [$2.04 billion]," said the managing director of the association of the music industry (BVMI), Stefan Michalk, in Berlin at a press conference today (March 24). "So the development in Germany is better than in the rest of the world with an estimated share of the world market of 9%."
According to Michalk the strategy of the German record companies not to neglect the traditional CD business paid off. "While internationally the physical markets suffered heavy losses, the CD and DVD sales in Germany are stable," he said.
For the first time, the German record industry published the income for labels from live entertainment, merchandising, brand partnerships and artist management in the BVMI statistics. That revenue was €122 million ($162.9 million) in 2009, which the BVMI said had grown from €110 million ($146.9 million) the previous year.
Last year the income from GVL, the German rights management society representing performing artists and record labels, was included. GVL licenses sound recordings and music videos for use in broadcast, public performance and new media and collects private copying remuneration for record labels and performing artists. It amounted in 2008 to €150 million ($200.3 million) and estimated the same figure for 2009.
The total music market in 2009, including record sales, performance rights and other revenue for labels totaled €1.80 billion ($2.40 billion) compared to €1.84 billion ($2.46 billion) in 2008 - a slight decrease of the whole market of 2.1%, according to the BVMI.
Downloads amount to 7% of the turnover, new business segments account for 6% and GVL income is about 8%.
CD Sales Increase
Turnover for digital downloads increased in 2009 by 31.7%, from €87.9 million ($117.3 million) the previous year to €118.2 million ($157.7 million). Album download bundles accounted for 52% of digital revenue, while single track downloads are 40%.
The turnover for CDs decreased 4.8% percent from €1.29 billion ($1.72 billion) in 2008 to €1.23 billion ($1.64 billion) in 2009. Michalk says one in five music consumers purchases digital music, but predicts that 5 million-strong consumer base will increase to 15 million by 2013.
The CEO of BVMI, Prof. Dieter Gorny, added: "Physical [CD] sales will remain the backbone of the music industry."
Compared to the previous year, the CD even increased its sales 1.5% in 2009 from 145.1 million the previous year to 147.3 million units. Gorny described this as an "exceptional position" in comparison to other international markets, even if value figures for CD were down.
Gorny explained the volume increase by reference to the country's stable number of retailers, conservative behavior of the consumers, attractive CD packaging and special editions with additional features such as music videos or exclusive information about the acts.
The CD single has become a niche product, though. In 2008 7.6 million units were sold, in 2009 only 5.7 million. The music cassette decreased from 3.2 million units in 2008 to 3 million units last year.
Vinyl sales increased in 2009 by 33% and broke the million mark: 1.2 million units were sold, up from 700,000 a year earlier.
"Probably the real figures are a lot higher. Many vinyl-records are sold in small shops or via online communities. They are not part of the statistics of the BVMI because they do not have scanner cash registers," explained Michalk.
Sales of music videos also increased in 2009: from 11.7 million to 12.1 million units, which Gorny suggested was partly down to uptake for the Blu-ray format.
In Germany, consumer electronic retailers are the biggest retail sector for music sales, responsible for 29% of the total turnover.
The number of music buyers has slightly increased from 39.6% in 2008 to 39.8% in 2009 of the population. The number of so-called intensive buyers that buy more than nine products per year increased. In 2008 4.3% of the population were intensive buyers and last year this increased to 4.7%.
About 5% of music consumers in Germany account for 34% of the music market.
The figures show that 26% of music consumers buy one to three music products a year.