Spotify, Pandora help slow decline in music record sales
The decline in worldwide recorded-music revenues slowed last year as more people subscribed to online services. The proportion of sales from digital destinations equaled those from physical formats for the first time.
Global revenue for the industry, whose best-selling album was the movie soundtrack to the film "Frozen," fell 0.4 percent to $14.97 billion last year, with declining downloads and physical sales, according to a group representing music labels. At the same time, music-streaming sites helped boost digital sales by 6.9 percent and Japan, the world's second- largest music market, registered digital growth for the first time in five years, the International Federation of the Phonographic Industry said.
The growth in digital sales was welcomed by an industry that's spent at least the past decade trying to counter drops in demand for CDs and the closing of record shops worldwide. Revenue from online music services rose 39 percent to $1.57 billion from the prior year, from subscribers and advertisers buying space on the sites. Some 41 million people pay subscriptions for music from services such as Spotify and Pandora, up from 28 million in 2013.
The rise of YouTube as a major online destination for music listening was also highlighted in the report. An estimated 57 percent of Internet users listened to music or music videos on sites such as YouTube in the past six months, versus 38 percent for a streaming site and 26 percent for download services like iTunes, the group reported, citing researcher Ipsos.
Preferred Format
Though downloads still account for 52 percent of digital sales, the figure declined by 8 percent last year and single- track downloads fell by 10.9 percent. Physical sales dropped 8.1 percent, though they remain the format of choice in a number of countries, including Germany with a 70 percent market share, Japan with 78 percent and South Africa with 62 percent.
In the U.S., digital revenue totaled $3.5 billion last year and accounted for 71 percent of the recorded music market.
Based on sales across all formats, Taylor Swift was named the most popular recording artist, followed by One Direction and Ed Sheeran. "Happy" by Pharrell Williams was the best-selling single last year, followed by "Dark Horse" by Katy Perry and "All of Me" by John Legend.