An increase in digital, performance rights and sync revenues, combined with the rise of rapidly growing emerging markets, contributed to a 0.2% rise in global trade revenue generated by the recorded music industry in 2012, according to the International Federation of the Phonographic Industry's (IFPI) annual "Recording Industry in Numbers" (RIN) report, published today (April 8).
As reported on Feb. 26 this year, when IFPI published its annual Digital Music Report, global recorded music sales totaled $16.5 billion in 2012, an increase of 0.2% on the previous year. More importantly, 2012 was the first year of industry growth since 1999, says IFPI, whose latest "Recording Industry in Numbers" report provides more detailed analysis and statistics on the current global music business.
According to this year’s RIN study, all revenue streams tracked by IFPI, with the exception of physical, grew in 2012. Global digital revenues were up 8% to $5.8 billion, climbing from $5.4 billion the previous year. Performance rights revenue was the fastest growing sector in the music industry, rising 9.4% to $943 million, up from $862 million in 2011. Synchronization grew 2.1% and totaled $337 million, up from $330 million. Global revenues from physical was $9.4 billion, a 5% decrease on 2011’s total of $9.9 billion.
Despite its 5% fall in trade revenue, physical still accounts for 57% of global recorded music sales, down from 60% in 2011. Digital now makes up 35% of global market (up from 33%), while performance rights equals 6% (up from 5%) and sync revenues account for 2% (level with 2011) of global recorded music sales. In five of the top twenty markets, digital sales now account for more than 50% of recorded music revenues, says IFPI.
In the global rankings, the U.S. retains the top position with sales totaling $4.48 billion, a slight 0.5% fall on the previous year’s total of $4.51 billion. U.S. physical sales in 2012 totaled $1.53 billion in trade value (down from $1.84 billion in 2011), accounting for 34% of the domestic market, according to IFPI.
U.S. digital sales totaled $2.60 billion (up from $2.34 billion), accounting for 58% of the market. Performance rights totaled $161 million (up from $130 million) accounting for 4% of total recorded music revenues in the U.S., compared to a global average of 6% and an European average of 10%. U.S. sync revenue was $191 million in 2012, up from $187 million in 2011, representing 4% market share.
The world’s number two market remains Japan, which experienced 4% growth in 2012, with recorded music sales totaling $4.42 billion, up from $4.25 billion in 2011. In third position is the United Kingdom, which, thanks to a weak Euro against the dollar, overtakes Germany, despite experiencing a 6.1% fall in recorded music sales. In 2012, U.K. music sales totaled $1.33 billion, down from $1.41 billion the previous year. Germany falls one place in the world rankings to number four, with music sales totaling $1.29 billion in 2012, down 4.6% on 2011’s figure of $1.36 billion.
The rest of the top ten music market rankings are as follows: France ($907 million, down 2.9%), Australia ($507 million, up 6.8%), Canada ($453 million, up 5.8%), Brazil ($257 million, up 8.9%), Italy ($217 million, down 1.8%) and Netherlands ($216 million, down 4.7%).
In total, nine of the world’s top twenty markets posted growth. Of those, Sweden ($176 million, up 18.7%) and India ($146 million, up 22.1%, representing its highest-ever sales level) moved up two places to #12 and #14, respectively. Norway ($118 million, up 6.7%) moved to #18 and China ($92 million, up 9%) re-entered the top twenty at #20, replacing South Africa ($85 million, down 5.8%).
Reflecting on the report, IFPI chief executive Frances Moore said in a statement: “After more than a decade of decline, the industry is on the path to recovery, with global revenues increasing for the first time since 1999.”
“At an international level, there is a renewed sense of optimism,” she continued. “This development has not happened by accident. The music world has adapted to the digital world. Today, it provides consumers with the experiences they want and is successfully monetizing music through a range of business models.”