“CALL me maybe” by Carly Rae Jepsen, a Canadian vocalist, was the best-selling song last year. Is it maybe also time to call the bottom for the music industry? According to data released on February 26th by the International Federation of the Phonographic Industry, sales of recorded music grew in 2012 for the first time since 1999, albeit only by 0.3%, to $16.5 billion (see chart).
The internet sank the music industry, but is now helping it to resurface. Digital sales rose 9% last year; a third of the music industry’s revenues now come through digital channels. Download stores represent roughly 70% of digital revenues. Popular “streaming” services, such as Spotify and Deezer, which pay a royalty each time a song is played, have also helped to rescue the business. Subscription services had 20m paying subscribers around the world in 2012, up 44% from a year earlier. Millions more use free advertising-supported versions.
The growth of smartphones has made it more attractive to own and stream music legally. Smartphones are the third most popular device on which to listen to music, after personal computers and hi-fi systems. Over 100 countries now host digital music services for legal downloading and streaming, compared with only 23 in January 2011.
Digital revenues may be rising, but physical sales still account for most of the music industry’s revenue—and they continue to fall almost everywhere (Japan and South Korea are exceptions).
