Germans Continue Digital Migration as Streaming Jumps 27%, Generating Nearly $1B in Revenue

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Berlin, Germany

Streaming now accounts for 55% of total revenue in Germany, where the CD format saw its market share erode from 36.4% to 29% in one year.

BERLIN — Streaming solidified its place as the main driver of revenue across Germany's music landscape in 2019, according to new figures released late last week by the Federal Music Industry Association (BVMI).

The trade organization announced in Berlin that revenue from the sale of CDs, vinyl, DVDs and downloads, as well as from booming streaming services, totaled €1.623 billion ($1.81 billion) in 2019, up 8.2% from 2018, when the world's fourth biggest music market raked in €1.582 billion ($1.78 billion). It signifies a move into the win column for the industry, which experienced two years of minimal declines overall in 2017 and 2018.

Several factors contributed to the growth in sales, but it really comes down to a huge year for audio streaming, which saw a 27% increase in sales to €895 million ($995.6 million) — accounting for 55.1% of total revenues. That’s up from a market share of 46.4% in 2018.

All-things digital brought in €1.046 billion ($1.16 billion), a figure that also includes the €100 million ($111.24 million) generated from downloads. That formerly powerful segment now accounts for just 6.2% of total revenues in the country — down from 7.8% and 9.9% in the last two years, respectively.

As for physical sales, which totaled €577 million ($641 million) overall, there’s good news and there’s slightly bad news. First, the positive: vinyl righted the ship following a down year and generated €79 million ($88 million) in 2019, a 13.3% increase after a 5.2% slide in 2018. As a result, its market share rose slightly to 4.9%, up from 4.6%. As for CDs, the format dropped 10.5% to €472 million ($525 million) for the year — that’s roughly half as bad as the format’s 20% decline in 2018. Market share-wise, CDs now make up 29% of the market, down a ways from 36.4% the previous year.

Overall, 64.4% of revenues last year were generated on the digital side, up 20.8%, with the remaining 35.6% by the two core physical formats, down 8.9%.

In terms of genre popularity, pop had the highest sales, at 25.8%. Moving into second place for the first time was hip-hop with 19.7% share, just ahead of rock at 19.6%.

BVMI chairman Dr. Florian Drücke called it a “very good year” for the nation’s music sector. "We are seeing the largest increase in revenues in a very long time, which illustrates the dynamic market in which the industry currently finds itself," he said.

"In recent years, the digital market has been successfully tapped and led to growth without losing sight of the physical product," Drücke added. "With just under a third of total sales, the CD remains an important market segment and should not be underestimated Vinyl continues to grow in the niche. Incidentally, video streaming has also grown significantly, but coming from a very low starting level: 31% more revenue from premium and advertising-financed offers still only contribute 2.9% to industry sales."

Drücke also commented on the implementation of the Copyright Directive, “which is intended to ensure that user upload platforms [such as YouTube] give creative professionals and their partners a fair share of the revenues.”