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Music industry's sales up for first time since '99

Published: Wednesday, Feb. 27, 2013 - 12:00 am | Page 6B
Last Modified: Wednesday, Feb. 27, 2013 - 7:59 am

PARIS – The music industry, the first media business to be consumed by the digital revolution, said Tuesday that its global sales had risen last year for the first time since 1999, raising hopes that a long-sought recovery might have finally begun.

The increase, of 0.3 percent, was tiny, and the total revenue, $16.5 billion, was a far cry from the $38 billion that the industry took in at its peak more than a decade ago. Still, even if it is not time for the record companies to party like it's 1999, the figures, reported Tuesday by the International Federation of the Phonographic Industry, provide a significant psychological boost.

"It's clear that 2012 saw the global recording industry moving onto the road to recovery," said Frances Moore, chief executive of the federation, which is based in London. "There's a palpable buzz in the air that I haven't felt for a long time."

For years, the music industry's decline looked terminal, with the record companies seemingly unable to come up with legitimate digital business models that could compete with the lure of piracy. Last year, however, digital sales and other new sources of revenue grew significantly enough to offset the continuing decline in CD sales.

"At the beginning of the digital revolution it was common to say that digital was killing music," said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Now, he added, it could be said "that digital is saving music."

Digital revenue comes in a variety of forms. Sales of downloaded singles and albums, from services like Apple's iTunes, continue to grow. More promising for the industry, however, are newer subscription-based offerings, including Spotify, Rhapsody and Muve Music. The number of subscribers to services like these grew by 44 percent last year, to 20 million, the federation said.

Several high-profile new entrants are expected soon, including subscription services from Apple and Google, promising additional subscriber fees and licensing revenue for the record companies. Other sources of revenue, including royalties from musical performances and marketing uses of music, have also been growing.

The industry's state of health remains highly uneven around the world. Overall, eight of the 20 biggest music markets showed growth last year, but in some countries that the industry classifies as "emerging," like Russia and China, piracy remains endemic and licensed, legitimate digital services struggle.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Eric Pfanner



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