The IFPI Digital Music Report 2014 shows a changing landscape for the recorded music sector

The IFPI have published their downloadable Digital Music Report 2014 - which shows that music fans’ growing appetite for subscription and streaming services has helped drive recorded music revenue growth in most major music markets in 2013, with overall digital revenues growing 4.3 per cent - and Europe’s music market expanding for the first time in more than a decade. Subscription services’ revenues were up 51 per cent in 2013, and it is estimated that more than 28 million people worldwide now pay for a music subscription, up from 20 million in 2012 and just 8 million in 2010. That said, and on a negative note, in the world's second biggest recorded music market, Japan, a sharp drop in sales meant that overall global industry revenues declined by 3.9 per cent. Global revenue excluding Japan fell by 0.1 per cent. Physical format sales still account for a major proportion of industry revenues in many major markets.  They account for more than half (51.4%) of all global revenues, compared to 56 per cent in 2012.  Although global physical sales value declined by 11.7 per cent in 2013, major markets including Germany, Italy, the UK and the US saw a slow-down in the rate of physical decline.  France’s physical sales grew by an estimated 0.8 per cent, helped by a local repertoire boom. 

World market revenues by format: 2012 & 2013 (US$ millions)

	2012 share	2012 value	2013 share	2013 value	% value change
Physical	56%	8,752	51%	7,730	-11.7%
Digital	36%	5,637	39%	5,872	+4.3%
Performance Rights	6%	929	8%	1,106	+19.0%
Synchronisation	2%	334	2%	322	-3.4%
TOTAL MARKET		15,652		15,029	-3.9%

As for piracy - well, the IFPI had this to say

"IFPI estimates, based on comScore/Nielsen data, that 26 per cent of internet users worldwide regularly access unlicensed services.  This estimate applies only to desktop-based devices: it does not include the emerging and as yet unquantified threat of smartphone and tablet-based mobile piracy as consumers migrate to those devices.  

Digital piracy is the biggest single threat to the development of the licensed music sector and to investment in artists.  It undermines the licensed music business across many forms and channels – unlicensed streaming websites, peer-to-peer (P2P) file-sharing networks, cyberlockers and aggregators, unlicensed streaming and stream ripping and mobile applications. 

IFPI’s report highlights five key areas where the recording industry is focusing its fight against piracy:

- Internet service providers (ISPs) have a demonstrable effect on reducing copyright infringement, when required to act.  European countries where ISPs are required by courts to block access to infringing sites saw Bit Torrent usage fall by 11 per cent during 2013 (comScore/Nielsen).  Countries without the block saw Torrent usage rise by 15 per cent over the same period.

- Search engines remain the largest referrer of traffic to unlicensed services and a recent study by MillwardBrown for MPAA showed that 74 per cent of people using unlicensed services for the first time found them through search engines.  Google’s policy to demote results from unlicensed services in results has not been effective. IFPI is pressing the case that search engines have both the technical expertise and a social responsibility to help tackle the problem.

- Litigation has played a key role when required. Recent litigation against isoHunt, Megaupload, Rapidshare and Hotfile has seen those companies either close or put in place measures to reduce the illegal use of their services.

- Legislation is the foundation of the industry’s operating environment. Priorities highlighted include proposed laws to introduce performance rights in markets such as China and Singapore; and the industry’s campaign  on copyright reform initiatives in Europe and Australia in order improve online copyright enforcement.


- Advertising is a major source of funding for unlicensed music services worldwide: a recent study by the Digital Citizens Alliance suggested that unlicensed services earned US$227 million in 2013 from piracy.  A successful project in the UK to tackle the problem led to the City of London Police launching a permanent programme to curb advertising on pirate sites.  Voluntary discussions based around codes of conduct are taking place in several other markets. "