Music industry body the IFPI has published its annual Digital Music Report (PDF link), revealing that global digital revenues for record companies were up 8% in 2011 to $5.2bn.
The report also claims that “major” digital music services like iTunes, Spotify and Deezer are now live in 58 countries around the world, up from 23 at the start of last year. 32% of industry revenues now come from digital sources, although in China that’s 71%, while it’s 53% and 52% in South Korea and the US respectively.
More stats: the IFPI says single-track downloads rose 11% by volume in 2011, while digital albums were up 24%. The IFPI estimates in its report that 3.6bn music downloads were bought in 2011 overall, up 17% year-on-year.
Meanwhile, 13.4m people were paying to subscribe to a music service by the end of 2011, up 65% year-on-year. The report notes that in Sweden – Spotify’s homeland – subscriptions accounted for 84% of digital music revenues in the first 11 months of 2011.
The IFPI makes a point of defending the business model of subscription services in the report, including tackling the debate around payouts to artists from services like Spotify. ” Music subscription offers a different model of return on investment for artists and record labels,” it suggests.
“In the a-la-carte environment, an album or track is downloaded once and paid for. In the streaming environment, a track or album may be listened to hundreds of times, each triggering a payment to rights holders. While the individual payment for a stream is lower than a download, the cumulative payment triggered by a consumer repeatedly listening to an album or track may be higher over a longer period.”
The debate around streaming royalties is a big issue for the IFPI, given that attention is starting to turn towards the contracts between artists and its member labels, rather than simply focusing on how much streaming services pay out to those labels in the first place.
IFPI CEO Frances Moore is upbeat about the report’s implications for 2012. “Legal services with expanding audiences have reached across the globe and consumer choice has been revolutionised. Meanwhile momentum is building in the fight against piracy as governments and a growing circle of intermediaries engage with our industry.”
She is keen to warn against any complacency on the part of rightsholders though, pressing for more action from governments – the report’s publication comes just days after the SOPA and PIPA legislation in the US was put on ice.
“Our digital business is progressing in spite of the environment in which it operates, not because of it. In 2012 the momentum needs to build further. We need legislation from governments with coordinated measures that deal with piracy effectively and in all its forms. We also need more cooperation from online intermediaries such as search engines and advertisers to support the legal digital music business.”
The IFPI has some piracy stats based on research conducted with Nielsen, claiming that 28% of internet users globally regularly access unlicensed music services. However, it claims that where new laws have come in, this use has decreased: down 26% in France since the Hadopi body started sending out filesharing warning notices in October 2010.
It also quotes analysis from a team of researchers claiming that in France “iTunes singles sales were 23 per cent higher than they would have been in the absence of Hadopi”. A stat that you can expect to see plenty of argument about in the coming days. The study based its methodology on “studying a control group of similar markets” without Hadopi.
Meanwhile, the IFPI says it secured the removal of more than 15m infringing links from search engines and other sites in 2011, up 115% on 2010.