Digital music has been out-earning physical music in some countries for major labels for a while now, but yesterday saw a notable (if not surprising) tipping point for Universal Music Group.
Its parent company Vivendi confirmed that UMG made more money from digital than physical in 2013. “For the first time in 2013, yearly digital sales exceeded physical sales,” explained Vivendi, with the official ratio being 51-49.
Vivendi also confirmed that UMG’s subscription and streaming revenues rose by around 75% in 2013, from €257m in 2012 to €450m last year. Billboard’s sources single out Spotify in particular as driving much of this growth – useful context for the acceptance of UMG and other major labels late last year of that service’s decision to make more music available for free to mobile users.
Streaming fuelling digital growth is hardly a new trend for the industry, most famously in Scandinavia, but increasingly in other markets too. As a Spotify stakeholder, UMG has understandably been one of the strongest backers of that service – and its rivals.
What the latest financial figures don’t address, though, is the debate around whether the transition from ownership to access benefits the biggest labels and artists more than it does independents.
Music Ally has regularly noted the mixed messages coming out of the industry on this score. Fear that major labels will hoover up an even bigger share of the revenues from streaming services has been a key factor in criticism from artists like Thom Yorke and David Byrne.
However, a number of prominent indie labels (and their licensing body Merlin) have talked publicly about indies having a better market share on streaming services than in download or retail stores. Vivendi’s figures show streaming is paying off for UMG, but that’s only part of the wider story.