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Physical-Reliant German Music Business Sees a Streaming Turnaround in the Future

A booming digital market helped lift the German music business in 2014 after 15 years in general decline.

A booming digital market helped grow the German music business in 2014 for only the second time in 15 years. Streaming was largely responsible for the growth of the market in 2014 with an increase of 78.6 percent, helping the larger business increase by 1.8 percent, to 1.48 billion euros in revenue.

The figures were announced today (March 5) in Berlin by BVMI, the German music industry association. Digital downloads and streaming music have both grown 13.1 percent compared with 11.7 percent in 2013. With a total turnover of 371 million euros (2013: 328 million), streaming and downloads now account for 25 percent of the German music market. The physical music market felt losses of -1.5 percent.

Earlier: German Music Market Up in 2014 on Rise in Streaming

In 2014 the German market was dominated by national artists, who made 157 million euros more than international acts in terms of sales. While German pop productions increased by 16.6 percent, pop artists from abroad suffered a 18.3 percent loss in revenue, reported BVMI. As previously reported, the most successful albums in 2014 were by the following artists: 1. Helene Fischer; 2. AC/DC; 3. Unheilig; 4. Xavier Naidoo; 5. Pink Floyd; 6. Herbert Grönemeyer; 7. Peter Maffay; 8. Kollegah; 9. Santiano; 10. Andreas Gabalier.

Philip Ginthör, CEO Sony Music Entertainment in Germany, Austria und Switzerland and BVMI board member, told Billboard that the report gives the entire music market a new perspective: “Streaming is the new driving force behind the creative industries. Every ninth German uses it. The market in Germany grew for the second time in 15 years. What is particularly conspicuous is that streaming services are currently signing up young people who previously did not spend any money on recorded music.”

Ginthör added, “audio and video streaming will account for around 40 percent of total music sales in four or five years’ time. Music offers an emotional sensation which is experienced live, owned as a product and streamed in playlists.”

Dr. Rolf Budde, president of the German music publishers’ association said he is “in two minds about streaming. On the one hand, the fact of the matter is that premium customers who pay €9.95 a month spend €120 a year on it. By comparison, the average CD buyer in Germany spends €56 a year at the moment. On top of this, the back catalog is leveraged more heavily in streaming. However, when you consider than a track has to be streamed 25 times to generate the same revenue as a single download, the whole dilemma becomes evident.”