Take What We Can Get Dept: Music Industry Enjoys Least Worst Year in a Decade

Least worst! They'll take it.

After suffering what felt to the industry like plagues of almost Biblical proportions since the advent of illegal downloads, music may be starting to recover.

Revenue fell by only 3 percent in 2011. Hardly cause to break out the Cristal and whistle up the private jet for quick trip to Ibiza, but compared to the past eight years, it is beginning to feel like a bottom has been reached and talk of the upside is not a ticket to the Betty Ford Clinic.

A welter of converging explanations may be responsible. The thrill of 'free' downloads has been supplanted by new technologies that promise better quality, less hassle - the message finally breaking through that this does, in fact, take bread out of artists' mouths. Tougher enforcement, though unpopular, is viewed as not worth the risk, even if acceptance of the moral hazard remains uncertain. Sparking it all is the growth of new musical forms, global markets

They may not be partying like its 1999, but the official mourning period may finally be over. JL

Robert Andrews reports in Paid Content:

The music industry enjoyed its best sales performance for eight years in 2011, as CDs’ collapse decelerated, digital sales continued growing and new services were launched to capitalise on in-roads made in combating piracy.

Global recorded music trade revenue fell by just three percent through the year. “2011 marked the least negative result in global recorded music sales since 2004, when revenues were flat,” the industry’s IFPI umbrella says in its just-released annual Recording Industry In Numbers report
•Physical revenue fell by only 8.7 percent (by $972 million), compared with 13.8 percent in 2010 (vinyl sales up 28.8 percent).
•Digital revenue grew 8 percent (by $389 million), compared with 5.6 percent in 2010, hitting $5.3 billion to make up 31 percent of the total.
•Growth in performance rights (4.9 percent) and synchronisation (5.7 percent) also boosted the industry.
Digital track and album sales grew 19 percent to 3.7 billion tracks, with Australia leading the way on 60 percent growth, compared with the U.S.’ eight percent and UK’s 10 percent. The U.S. sold $1.27 billion in digital singles, the UK $176.2 million.

It all adds up to one of the rosiest outlooks for the music business for years. In all, music sales revenue grew positively in 17 countries.

None of this changes the fact that the industry has shed about 40 percent of its recorded music revenue in the last 10 years. But that was then - now, a new set of circumstances is in play…

•The IFPI credits new services like Spotify, iTunes Match and Facebook integration with helping the U.S. music market finish the year flat.
•The industry has successfully lobbied some national governments to introduce graduated-response anti-piracy measures.
•In their wake, growth in downloads has continued apace and unlimited-access operators like Rdio, Mog, Spotify and a reborn Rhapsody are bringing a new revenue model to the party that, supposedly, does not cannibalise downloads.
In the U.S., digital formats became the majority (51 percent) of recorded music sales. In the UK, that was 32 percent.