Digital Strength Drives First Growth in Music Sales Since 1999 as File Sharing Declines

[MacRumors]

AllThingsD points to a report from the International Federation of the Phonographic Industry (IFPI) revealing that 2012 saw the first growth in the music market since 1999, a milestone made possible by the strength of the digital music market.

Global recorded music industry revenues rose by an estimated 0.3 per cent to US$16.5 billion in 2012, the first year of industry growth since 1999. Digital revenues saw accelerating growth for the second year running, up 9 per cent, with most major digital revenue streams - downloads, subscription and advertising-supported - on the rise.

The report notes that download sales, a market dominated by Apple's iTunes Store, saw a 12% increase in volume. Downloads still represent 70% of the digital music market even as subscription services continue to make inroads and are expected to cross 10% of the digital market this year.

In particular, the report points to the rapid globalization of digital music access, with the number of countries having access to digital music growing from just 23 in early 2011 to well over 100 today. Apple's iTunes Store is a major part of that expansion, with the most recent move to add 56 new countries last December extending Apple's music reach to a total of 119 countries.

The report from IFPI comes just as research firm NPD notes that music file sharing in the U.S. fell sharply in 2012 as customers continue to embrace alternatives such as free streaming services from the likes of Pandora and Spotify. According to the report, the number of peer-to-peer (P2P) music download users fell by 17% last year to account for 11% of Internet users, down from 20% seven years earlier.

The volume of illegally downloaded music files from P2P services also declined 26 percent, compared to the previous year; however P2P wasn't the only sharing activity to shrink. Music files burned and ripped from CDs owned by friends and family fell 44 percent, the number of files swapped from hard drives dropped 25 percent, and the volume of music downloads from digital lockers decreased 28 percent.

NPD's survey indicates that 40% of consumers who had illegally downloaded music in 2011 had either stopped doing so in 2012 or reduced the amount of downloading, with availability of free streaming services being cited as the primary reason for the shift.

Article Link: Digital Strength Drives First Growth in Music Sales Since 1999 as File Sharing Declines

[glimp7]

Most of these music sales are fueled by a failing industry, clinging on to those with just enough talent that would sound ok with auto-tune.

[ouimetnick]

Happy RIAA?

[mw360]

Seems like good news. Lets get angry about it.

[KanosWRX]

I truly feel the likes of Spotify and Pandora have caused this shift. If you make most of the music easy to access at a fair price. People will pay for it. And so its starting to happen in the music industry.

I just wish the TV and Movie industry would follow suite. I would gladly pay 20-30 bucks for a TV/Movie service that offered up 90% of the titles out there in a high quality format >2-5 MB a sec, or better yet the possibility to cache blu-ray quality for viewing with full DTS-HD audio. Give the people a high quality service with >90% of the titles, similar to what Spotify is doing. and people will start paying you money again. Its that simple!

[ThatsMeRight]

Originally Posted by KanosWRX

I truly feel the likes of Spotify and Pandora have caused this shift. If you make most of the music easy to access at a fair price. People will pay for it. And so its starting to happen in the music industry.

I just wish the TV and Movie industry would follow suite. I would gladly pay 20-30 bucks for a TV/Movie service that offered up 90% of the titles out there in a high quality format >2-5 MB a sec, or better yet the possibility to cache blu-ray quality for viewing with full DTS-HD audio. Give the people a high quality service with >90% of the titles, similar to what Spotify is doing. and people will start paying you money again. Its that simple!

Yep, I totally agree. It now feels like as if CDs are ancient and services like iTunes are at best "out-dated". Spotify - for me - is perfect.

I also feel the same as you about the TV and movie industry. There are just a few video on demand services where I live, and often the most recent movies in the digital library are movies that were available on DVD/Blu-Ray months ago. I'd like to watch an episode of "The Big Bang Theory", "The Following", "Dexter", etc. just an hour after it was first aired wherever in the world. I'd like to watch a movie on the same day it's out on DVD/Blu-Ray.

I would definitely be willing to pay something like $20 a month - maybe even a little bit more - so I can watch any episode and any movie whenever and wherever I want: whether that is a "Star Trek" episode from the 90s, or an episode of "Anger Management" which first aired just an hour ago.

[Akuratyde]

Originally Posted by ThatsMeRight

Yep, I totally agree. It now feels like as if CDs are ancient and services like iTunes are at best "out-dated". Spotify - for me - is perfect.

The operative phrase here being "for me". For you Spotify is perfect, for many others like myself it's useless. I listen to a lot of music that simply isn't available on Spotify and never will be. I also live in an area that has spotty cell coverage and I spend a lot of time in the car. Not only would I never want to waste my 4G on streaming while in the car, I couldn't even if I wanted to.

I think it's great that so many people find streaming services a perfect solution for them but it comes across a bit smug to be saying iTunes is "outdated" when for me, it's the perfect option.

[damacus]

Originally Posted by Akuratyde

The operative phrase here being "for me". For you Spotify is perfect, for many others like myself it's useless. I listen to a lot of music that simply isn't available on Spotify and never will be. I also live in an area that has spotty cell coverage and I spend a lot of time in the car. Not only would I never want to waste my 4G on streaming while in the car, I couldn't even if I wanted to.

I think it's great that so many people find streaming services a perfect solution for them but it comes across a bit smug to be saying iTunes is "outdated" when for me, it's the perfect option.

If you pay for Spotify premium ($10/mo) you can store your playlists on your phone for offline playback. You just pull up the playlist on the phone and mark it as "make available offline" and it'll download everything to the phone.

As far as the selection, there are definitely gaps in what Spotify has, but you can fill in those gaps from your personal collection and Spotify will play those files. (Assuming they're mp3 format anyway.)

[ThatsMeRight]

Originally Posted by Akuratyde

The operative phrase here being "for me". For you Spotify is perfect, for many others like myself it's useless. I listen to a lot of music that simply isn't available on Spotify and never will be. I also live in an area that has spotty cell coverage and I spend a lot of time in the car. Not only would I never want to waste my 4G on streaming while in the car, I couldn't even if I wanted to.

I think it's great that so many people find streaming services a perfect solution for them but it comes across a bit smug to be saying iTunes is "outdated" when for me, it's the perfect option.

Yep, I realized that and that's why I said "for me". That said, I still feel like Apple is using a business model that might be "fine" or "good" at this point, but will be out-dated in the future (and is out-dated in some areas in the world already). For example, CDs will still be modern in 3rd world countries.

I guess our (mobile communications) infrastructure is a bit better here, because 3G networks here can easily achieve speeds around 10 Mbps, and in some areas even around 20 Mbps - only the more rural areas will see speeds of around 5 Mbps. Right now, carriers are busy with building a 4G network plus upgrading current 3G networks (they're aiming to double the speed everywhere).

Streaming music really doesn't use that much data and you can also download music in the Spotify app at home, which you can use for offline play (in case you have no internet connection or you don't have any MBs left in your data bundle).

I get what you are saying, but even for you I feel like Spotify can be a nice addition. $10 a month and for that money you can listen to any song - be it via streaming, be it via downloading it upfront via Wi-Fi and then listening it online without using an internet connection.

Also, you say that you listen to a lot of music that isn't available on Spotify. Can you name a few songs? Spotify currently has 20+ million songs in it's library. I can't find any recent numbers for iTunes: the latest numbers Apple has announced are a little over a year old; at that point they were talking about 20 million songs.

No hard feelings.

[RMo]

Originally Posted by Akuratyde

The operative phrase here being "for me". For you Spotify is perfect, for many others like myself it's useless. I listen to a lot of music that simply isn't available on Spotify and never will be. I also live in an area that has spotty cell coverage and I spend a lot of time in the car. Not only would I never want to waste my 4G on streaming while in the car, I couldn't even if I wanted to.

Your first point is certainly a limiting factor, though it's worth noting that you can also use Spotify to play local tracks. However, for your second point, Spotify* enables you to cache playlists offline, in part to avoid the very problem you mentioned. And if you're driving, I certainly hope that if you're driving you already have a playlist made and aren't searching for new music at the same time. So as long as you don't bump up against the cache limit, it could work for other people with this problem--but of course, for you, the first is much more limiting.

*Actually, Spotify Premium, but you need this for mobile anyway.

[bawbac]

Originally Posted by ThatsMeRight

Yep, I totally agree. It now feels like as if CDs are ancient and services like iTunes are at best "out-dated". Spotify - for me - is perfect.

How well does this streaming work for mobile vehicles with no WiFi or cellphone coverage?

[ThatsMeRight]

Originally Posted by bawbac

How well does this streaming work for mobile vehicles with no WiFi or cellphone coverage?

Well, you can't stream music without an internet connection, but you can download any song or album - for free - from within the Spotify-app and play these songs offline (that is without internet connection).

Originally Posted by dustinsc

I doubt it's legal where you are. Unless you live in a country that did not sign the Berne Convention, either you or the web site you're downloading from is criminally or civilly liable for the unauthorized copying of the music. The law might lack teeth, but it's probably not legal.

It is legal. The thing that is illegal is sharing (as in: uploading) movies or songs yourself.

Originally Posted by bawbac

Can I store over 6000 songs for offline playback like my iPod?

Yes, you can. That is, if there's enough free space available.

[Nebulance]

Originally Posted by ThatsMeRight

Yep, I totally agree. It now feels like as if CDs are ancient and services like iTunes are at best "out-dated". Spotify - for me - is perfect.

Spotify seems pretty cool, but with digital services I'm still concerned about sound quality. CDs are still superior, and vinyl even more so, with proper speakers.

There's a major difference between FLAC files and MP3s. Digital services are starting to increase the bitrate, but it's still not high enough -- most songs on iTunes are still in the 200K range (is that true, I'm not sure?)

[xmichaelp]

Originally Posted by Nebulance

There's a major difference between FLAC files and MP3s.

128k/s? yes. 320k/s? no. It's a placebo.

[lobster68w]

Originally Posted by KanosWRX

I truly feel the likes of Spotify and Pandora have caused this shift. If you make most of the music easy to access at a fair price. People will pay for it. And so its starting to happen in the music industry.

Not only that, but thanks to Pandora, I've discovered a ton of new music I never would have found otherwise.

[JHankwitz]

Originally Posted by glimp7

Most of these music sales are fueled by a failing industry...

Yes, failing because of all the theaft over the past 20 years. The only way they can make money is to have enough money to go on tour. Consumers are getting exactly what they pay for. If they pay nothing, that's just what they'll get.

[FactVsOpinion]

Probably all gangnam style

[Eidorian]

I will just make another trip to the library.

[bjm2660]

Originally Posted by FactVsOpinion

Probably all gangnam style

and its country counterpart: gingham style

[SAdProZ]

"What goes down must come up." —Steve Jobs

[ThatsMeRight]

Yep, I always downloaded music (which, I must note, is not illegal over here) but ever since services like Spotify have emerged I do no longer see the need to download music.

You can listen to almost any song, anywhere for just $10 a month. It's ideal and it is so cheap that it isn't even worth it to download music for free, and it is not as expensive as buying your songs on - may I dare - "old fashioned digital services" like iTunes.

[Monkeydude]

Originally Posted by ThatsMeRight

Yep, I always downloaded music (which, I must note, is not illegal over here) but ever since services like Spotify have emerged I do no longer see the need to download music.

Which Country would that be?

(I assume we are talking about downloading without paying)

[ThatsMeRight]

Originally Posted by Monkeydude

Which Country would that be?

(I assume we are talking about downloading without paying)

The Netherlands. Hello neighbour.

[dustinsc]

Originally Posted by ThatsMeRight

Yep, I always downloaded music (which, I must note, is not illegal over here) but ever since services like Spotify have emerged I do no longer see the need to download music.

You can listen to almost any song, anywhere for just $10 a month. It's ideal and it is so cheap that it isn't even worth it to download music for free, and it is not as expensive as buying your songs on - may I dare - "old fashioned digital services" like iTunes.

I doubt it's legal where you are. Unless you live in a country that did not sign the Berne Convention, either you or the web site you're downloading from is criminally or civilly liable for the unauthorized copying of the music. The law might lack teeth, but it's probably not legal.

[milo]

While it's good to see piracy drop, if the main reason for it is streaming services that compensate the artists practically nothing, that's not really much of an improvement for the actual musicians.