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The global music market achieved a key milestone in 2015 when digital became the primary revenue stream for recorded music, overtaking sales of physical formats for the first time according to IFPI’s Global Music Report 2016.
Digital revenues now account for 45 per cent of total revenues, compared to 39 per cent for physical sales.
IFPI also reported a 10.2 per cent rise in digital revenues to $6.7 billion, with a 45.2 per cent increase in streaming revenue more than offsetting the decline in downloads and physical formats.
Total industry revenues grew 3.2 per cent to US$ 15.0 billion, leading to the industry’s first significant year-on-year growth in nearly two decades. Digital revenues now account for more than half the recorded music market in 19 markets.
However, there is a fundamental weakness underlying this recovery. Music is being consumed at record levels, but this explosion in consumption is not returning a fair remuneration to artists and record labels. This is because of a market distortion resulting in a “value gap” which is depriving artists and labels of a fair return for their work.
IFPI Chief Executive Frances Moore said: “After two decades of almost uninterrupted decline, 2015 witnessed key milestones for recorded music: measurable revenue growth globally; consumption of music exploding everywhere; and digital revenues overtaking income from physical formats for the first time. They reflect an industry that has adapted to the digital age and emerged stronger and smarter. “This should be great news for music creators, investors and consumers. But there is good reason why the celebrations are muted: it is simply that the revenues, vital in funding future investment, are not being fairly returned to rights holders. The message is clear and it comes from a united music community: the value gap is the biggest constraint to revenue growth for artists, record labels and all music rights holders. Change is needed – and it is to policy makers that the music sector looks to effect change”.