The French recorded music market fell 5.3 percent last year, in familiar fashion — the decline in physical sales was greater than the net gain in digital revenue. Streaming revenues made strong gains, while download sales experienced a sharp decline. That’s the short version.
As for the long version, France deserves attention not only because it’s one of the largest music markets in the world, but it’s also home to Deezer, the world’s second-largest music subscription service behind Spotify, which is also available in France. Just as the Nordic countries are watched closely for their early and enthusiastic adoption of Spotify, founded in Sweden, France should be equally scrutinized for evidence of Deezer changing consumer behavior in its home market.
France’s digital music market posted a 6-percent gain last year. Streaming revenue from subscription services like Deezer rose 35.2 percent, to €48.4 million ($64.4 million). Ad-supported streaming grew 32.2 percent to €24.1 ($32.1 million). But the decline in digital download sales evaporated about half streaming gains. Download sales fell 14.2 percent to €53.8 million ($71.5 million). Streaming was 55 percent of total revenues, up from 43 percent in 2013. Downloads were 40 percent of revenue, down from 50 percent.
The rest of the released figures point to decent streaming growth: the number of subscribers grew 35 percent, to 2 million; in December, there were 10.7 million audio streamers, a 67-percent increase, who streamed 12 billion songs, a 40-percent increase.
Unlike the Nordic countries, the CD is still dominant in France. Physical sales declined 11.5 percent, to €325.3 million ($432.4 million) last year, and represented 57.0 percent of recorded music revenue, including performance royalties. If performance royalties are excluded — this is a closer representation of consumers’ involvement with music — physical sales represented a very substantial 70.9 percent of total recorded music revenue.
Yet French consumers are more attached to the CD than these numbers might at first indicate. A different picture emerges if one focuses only on purchases (physical revenues, downloads, subscriptions) and ignores revenue-passive activities (ad-supported streaming royalties and performance royalties). In this calculation, physical revenue accounted for 76.1 percent of last year’s recorded music revenue, while the digital share was 23.9 percent.
Each country is different in how new technologies are adopted by consumers and how old technologies fade away. France does not have the conditions that fueled streaming growth in Sweden — high broadband penetration and widespread computer ownership, fast mobile broadband and digitally literate citizens. Instead, French consumers are behind their counterparts in many other countries in making the long, unpredictable transformation to digital music.
The above numbers show the best way to think about France in 2014: when French consumers decided to spend money on recorded music last year, three out of four Euros went to CDs.
Total revenues: €570.6 million ($758.5 million), -5.3%
Physical revenues: €325.3 million ($432.4 million), -11.5%
Digital revenues: €133.4 million ($177.3 million), +6%
Downloads: €53.8 million ($71.5 million), -14.2%
Subscription: €48.4 million ($64.4 million), +35.2%
Ad-supported streaming: €24.1 million ($32.1 million), +32.3%
Performance Rights: €112.0 million ($148.9 million), +1.8%