The music industry was the first to feel the various effects of a digital era, and as time passed, their pockets grew thinner and thinner. After more than a decade of losing money to this arch “enemy”, the industry is finally coming around with an increase of 0,3% in their revenues. Not much, but could this mean an unexpected recovery?
The report was released on Tuesday by the International Federation of the Phonographic Industry, who said that the total revenue of the music industry has reached 16.5% billion, the first sign of an increasing income.
“It’s clear that 2012 saw the global recording industry moving onto the road to recovery,” Frances Moore, chief executive of the London-based federation, said.
“There’s a palpable buzz in the air that I haven’t felt for a long time.”
It’s been a tremendous struggle for the music industry to go head to head with a digital era that proved to be stronger, more reliable, and more accessible than anything music enthusiasts had seen before. However, starting with 2012 the unthinkable happened – digital sales, along with new sources of revenues brought more money into the industry’s pockets, a fortunate event that helped countering the continuing decline in CD sales.
“At the beginning of the digital revolution it was common to say that digital was killing music,” Edgar Berger (CEO of the International, Sony Music Entertainment) said.
But things have changed since then, and now Edgar Berger says that “digital is saving music”.
He is referring to digital services that support the music industry, and they include iTunes, subscription-based services such as Spotify, Rhapsody, Muve Music, and the likes of it. As a matter of fact, an increase in the number of subscribers to these services has been recorded, with 44% more users than last year.
The obvious success of subscribe-based services, has made giant companies like Apple and Google think; it’s very likely that the two are to introduce the same kind of services in the near future.
Royalties from musical performances and marketing models are also on the rise.
The improvement in revenues is not, however, felt in countries like China and Russia, where music piracy is still a major problem. Also, Great Britain could follow suit, especially since one of its prominent retail music chain went out of business (we’re referring to the HMV).
As for the United States, music sales had dropped in 2012, but, according to the British “Enders Analysis” research group this is going to change in 2013, with revenues rising from $5.32 billion to $5.35 billion.
Alice Enders, senior analyst at the research firm, is confident that the music industry will be rising from its ashes sooner than we think.
“If there is a lesson to take away, it is probably that the earlier you can embrace new business models and services, the better,” Paul Brindley, chief executive of Music Ally, said.
“Whether this is signaling a turnaround that will lead to inexorable growth, who knows? But it does at least signal a bottoming out, with room for growth.”
Well, if services like Spotify would reach the Eastern bloc (and not only), maybe Mr. Paul Brindley is right. Accessibility, a fair price, both online and offline purchasing, and embracing a digital era that’s obviously not trying to take the bread off creators’ mouth are things the industry should seriously consider.