OpEd Commentary: The Numbers in the Music

By Fernando Gonzalez

The recently released Recording Industry in Numbers 2010, the report by the International Federation of Phonographic Industry, the London-based organization that represents record companies, offers a snapshot of the changing state of the business.

Predictably, overall sales numbers declined (at 7% globally) — and the industry sees piracy as the most important and dangerous challenge. But perhaps the most intriguing news here is the confirmation, in hard numbers, of a changing business, one in which physical sales are going the way of the 8-track and digital sales continue to grow (9.2%, or U$ 4.3 billion, ten times the value in 2004) although not enough yet to compensate for other losses.

In discussing piracy, the report notes the positive impact of legislation to combat piracy.

In a recent interview in his offices in Miami, Raul Vazquez,  IFPI Latin America’s Regional Director, said “The impact of digital piracy is much graver than the physical piracy — but the solution is much easier. It’s graver because it impacts the natural consumer of music be it of digital or physical product. That’s not the case with the physical piracy. But solving should be easier. The biggest obstacle [to solve digital piracy] is the lack of cooperation by the service providers and the lack of will by the governments.”

Susan Boyle

Here are some facts from the report.

– It’s notable that in the music sales chart the number one seller reflects the power of … television.  Susan Boyle’s I Dreamed a Dream was the best global selling album of 2009. It sold 8.3 million copies. It’s hard to begrudge her success. She can sing – and it looks as though many of us still like a good Cinderella update.

Michael Jackson

– The rest of IFPI’s Top Ten list includes #2 Black Eyed Peas (The End) , Michael Jackson (thrice, with #3 This is It, #8 Thriller and #9 Number Ones,  confirming that, in pop music, death continues to be a great career move), #4 Taylor Swift (Fearless), #5 Lady Gaga (The Fame), #6 Michael Bublé (Crazy Love), #7 U2 (No Line on the Horizon) and #10 Andrea Bocelli (My Christmas) .

– Global sales for 2009 declined by 7.2% to US$17 billion. The United States and Japan, the world’s two biggest markets, account for 80% of the decline. In the rest of the world, the fall was 3.2%.  But in Latin America, digital music sales nearly offset the loses in physical sales. In that region the decline was only of 0.7 %.

– Physical sales dropped by 12.7% globally.

– Digital sales rose by 9.2% to US$4.3 billion, more than ten times the digital market value in 2004.

– In the United States, digital sales account for nearly half (43% ) of the recorded music market.

– More  than 30 countries experienced double-digit growth rates in digital sales. And in 17 of those markets – including Argentina, Australia, Austria, Denmark, Finland, Singapore, Sweden and UK —  digital sales grew by more than 40%.

-There are now more than 12 million tracks available from over 400 legal music services worldwide.

– Contradicting popular belief, the reports notes that “Growth in live music revenues (up 4%) has slowed significantly in the last three years.”

– Also, according to IFPI, “Peer-to-peer (P2P) piracy remains the most prevalent channel for illegal distribution of unauthorized content, accounting for more than 20% of internet traffic globally. In Latin America this increases to 35% and in Europe to 29%.”

For more info check http://www.ifpi.org

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