Australia's record biz has paid a heavy price for the erosion in demand for physical product and, to a lesser extent, downloads.
New wholesale figures published by trade body ARIA reveal the recorded music market contracted by close to double-digits in 2014, though streaming and vinyl did offer a glimmer of a brighter future.
The overall market shrank to A$317.7 million ($253 million), down 9.62% from the previous year. The result was "slightly better" than the previous year's 11.6% decline, ARIA notes. It's cold comfort, though the trade body does manage to find positives among the gloom.
There's certainly no joy to be found in the CD format. CD albums, which still account for the bulk of all revenue, continues its inevitable march towards insignificance and generated just A$115.3 million ($92 million) last year, down 18.6% from the previous year. Meanwhile, vinyl albums continue to play a lone-hand among physical formats, soaring 127% in value to A$6.4 million ($5.1 million). The gains from vinyl were offset by the losses reported by music DVD/video, which contracted to A$7.5 million from A$14.2 million ($11.3 million). CD singles enjoyed a mini-revival of nearly 33%, though its base of less than $1 million means the format is now largely irrelevant.
All told, physical product saw 18.38% of its value stripped away, and the various formats have a combined worth of A$130 million ($103 million).
For the year, digital music sales accounted for 59% of the market, though the diminishing impact of downloads dragged-down the entire sector. The nascent streaming sector powered ahead in 2014, with income from streaming services rising by 111% to A$23 million ($18 million).
"This movement towards music consumption via streaming services is likely to continue in 2015 with new premium services from Apple and YouTube set to enter the market, offering music consumers even more choice in how they buy and listen to music," notes ARIA in a statement. Australia hosts more than 30 digital music services, and it's a popular test market for international brands looking to expand.
Streaming was the only sunny spot in ARIA's results. Digital track downloads, the biggest revenue generator in digital music Down Under, fell away by 10.2% to A$85 million ($67 million) while digital albums contracted slightly to A$67 million ($53 million). The downturn in the market for downloads meant the digital business as a whole shrunk by 2.36%, to A$187 million ($149 million).
ARIA highlighted the "exceptional year" for homegrown artists to overall sales, and welcomed the government's promise for help on the piracy front. Federal communications minister Malcolm Turnbull and Attorney-General George Brandis last month gave ISPs a timeline to figure out a solution for online piracy, or face government intervention.
The "illegal consumption of music is a constant challenge to the music business which continues to affect its prospects of growth," notes ARIA. "2014 proved to be a formative year for the industry as the Federal Government announced that it will take steps to address the serious issue of online copyright infringement."
According to year-end data published recently by ARIA, Aussie artists accounted for 36 of the top 100 albums, up from 27 in 2013 and 2012, and 18 of the top 100 singles for the year, up from 13 in 2013 and 11 in 2012. The impact of Aussies goes further than domestic charts. The likes of Sia, 5 Seconds of Summer and Iggy Azalea had No. 1s in the U.S. last year, while the likes of Flume, Courtney Barnett, Vance Joy and Chet Faker have made their moves.
"As the industry continues to transform itself, we remain committed to embrace our digital future," notes ARIA CEO Dan Rosen in a statement. "Our goal as an industry is to make it easier for music fans to support the artists they love by developing innovative new ways to sell music. The continued growth in the subscription market shows that the local music industry is leading the way in streaming digital content. It is an exciting time, as the consumption of music grows through an ever-expanding range of options -- whether through subscription services, digital downloads or visiting the local record store to buy vinyl."