Global Music Business Revenues Fall Below $15 Billion, According to IFPI Report

Global music business revenues declined by .4 percent in 2014, dipping below $15 billion, according to data from the International Federation of the Phonographic Industry (IFPI). The industry’s global revenues for 2014 brought in US$14.97 billion, down from US$15.03 billion in 2013.  In 1999, by contrast, the global industry generated approximately $26.6 billion in annual income.

The IFPI report released today also found that, for the first time, digital music services match those from physical format sales. Digital revenues rose 6.9 percent to US$6.9 billion (U.S.) in 2014, representing 46 percent of all global music sales. This matches the physical format, which also represented 46 percent of the market.

Subscription revenues continued its steep increase in revenues, climbing 39 percent, while download sales declined 8 percent. The number of paying users of subscription services rose 46.4 percent, up to an estimated 41 million. Subscription services now represent 23 percent of digital market and generate US$1.6 billion in trade revenues.

It is also important to note that in the reporting of IFPI’s 2014 global market data, SoundExchange revenues in the U.S. were reclassified from “performance rights” to “digital,” which has resulted in an upward adjustment of digital revenues and growth, and a corresponding downward adjustment in performance rights revenues and growth.

Physical sales still dominate in several key global markets, including Japan (78 percent), Germany (70 percent), and France (57 percent). Within the physical format, vinyl sales saw revenues increase 54.7 percent, accounting for two percent of global revenues.

According to the IFPI report,  performance rights income increased 8.3 percent and accounts for 6 percent of total industry revenues (US$948 million). Synch revenues increased 8.4 percent in 2014, representing two percent of the market. Synch found big gains in markets including France (up 46.6 percent), German (up 30.4 percent) and Japan (up 33.5 percent).

 Frances Moore, chief executive of IFPI, says: “The recorded music business has always led the way for creative industries in the digital world. That leadership continues today as the music industry’s digital revolution continues through new phases, driven by the consumer’s desire for access to, rather than ownership of, music. It is a reflection of how much we have adapted that digital revenues today are, for the first time, on a par with physical.

“The headline statistics of 2014 speak for themselves, with overall revenues still largely flat, down by 0.4 per cent. Music companies are charting a path to sustainable year-on-year growth. That path was never going to be straight, but we are making great strides along it, embracing new models, licensing, investing and improving consumer choice.”