• Friday, June 21, 2024
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BusinessDay

Music industry records 10% sales growth

Lady Gaga

The music industry’s global recovery picked up pace last year, with sales rising almost 10 per cent as a boom in Latin America and Asia helped offset stagnation in Europe.

Revenues grew 9.7 per cent worldwide to $19.1bn, the International Federation of the Phonographic Industry said on Tuesday, up from a rise of 7.4 per cent in 2017.

That marks the fourth consecutive year of growth, continuing a recovery from a 15-year decline when the industry struggled to adapt its business model in the early stages of the online era.

The European market was virtually flat, with sales rising just 0.1 per cent having grown 4.3 per cent in 2017 and 9.1 per cent in 2016. The slowdown was led by a near 10 per cent fall in Germany, where streaming failed to counterbalance a decline in sales of physical formats, mostly CDs.

The German drop was so pronounced that the UK, where sales grew 3.1 per cent, overtook it as Europe’s biggest music market and the world number three, behind only the US and Japan.

Frances Moore, chief executive of the IFPI, said the European performance varied from country to country and that the market should recover next year.

Other parts of the world enjoyed a much stronger performance, with sales surging by 17 per cent in Latin America, led by Brazil and Mexico, 14 per cent in North America and 12 per cent in Asia and Australasia.

Stu Bondell, head of business and legal affairs for Sony Music’s international arm, said the challenge for large music companies was to move more consumers in “high potential” markets such as China and Latin America to subscription services and to turn successful songs in those markets into global hits.

“For the first time in history you can say a hit could come from anywhere,” he said.

North American and British acts including Drake Ed Sheeran, Eminem and Lady Gaga remained among the most popular in the world in 2018 but other markets started to shine.
Chinese singer Tia Ray had the seventh-biggest selling single of the year, while South Korean boy band BTS had two of the three biggest-selling albums. Johnny Hallyday, who died in December 2017, had the world’s fifth-biggest selling album led by strong sales in France.

The music sector’s recovery continues to be driven by streaming, which grew by 34 per cent and now accounts for 47 per cent of the industry’s global revenues.

Sales by paid-for services including Spotify, Apple Music and Deezer increased 33 per cent last year, with 255m users worldwide now paying for a music subscription.

That offset the continued decline in older formats, with revenue from physical music sales dropping 10 per cent — almost twice as fast as in 2017. Sales from music downloads, once the lifeblood of digital music, fell 21 per cent.