From The Toronto Star:
It’s taken 14 years, but the music business has gotten its mojo back.
Last year, the global recorded music industry grew by 0.3 per cent, marking the “first year of industry growth since 1999,” according to a report by the International Federation of the Phonographic Industry (IFPI).
“After years of drop after drop after drop, any increase might be cause, not for cautious celebration, but for riotous celebration,” said Graham Henderson, president of record industry advocate Music Canada.
And “the overall Canadian marketplace helped bring that aggregate world number upwards,” said Randy Lennox, Universal Music Canada’s president and CEO, noting that sales of physical CDs here “did not deteriorate to the extent that people had suggested they would” last year.
According to Billboard, digital album sales grew 26 per cent to 10.5 million in Canada in 2012, while physical album sales fell 12 per cent to 20.6 million.
“It is hard to remember a year that has begun with such a palpable buzz in the air,” said Frances Moore, chief executive of the Swiss-based IFPI in the non-profit’s Tenth Digital Music Report.
While total worldwide revenue was $16.5 billion, down from $38 billion more than a decade ago, the report credits the new growth to the recording industry learning to meet the needs of consumers and making money in the digital marketplace through subscription services, download sales, advertising-supported video streaming, digital radio and performance rights.
“We went from, in the mid-2000s, being stuck as an industry and not open to change, which is what caused the decline in the first place, to becoming quite open to change, with a real entrepreneurial spirit that, frankly, had been absent,” said Lennox.
The lean years forced creativity through adaption to social media and collaborations with tech companies, added Eric Alper, eOne Music Canada’s director of media relations. “It took a couple of years to line up what the industry wanted to do in relation to how the customers want to consume their music,” he said.
Social media was the game changer; it gets credit for the explosive careers of British boy band One Direction and B.C.’s Carly Rae Jepson, whose “Call Me Maybe” was the No. 1 international single last year.
“Harlem Shake” by American producer Baauer “went from 117 this week to No. 4 on the Canadian chart, and all of that was pretty much chalked up to getting the word out by YouTube and then releasing the single up on iTunes,” said Alper. “The speed of how a hit happens now is so quick.”
However, even with more than 500 legal digital music services operating worldwide, and a 17 per cent decline in illegal music file sharing according to a new release from global information company The NPD Group, unauthorized downloads are still cutting into revenue.
And Alper hopes to see Canadian telecom companies introduce digital music services that can be billed like home cable or internet fees. “The easier it’s going to be for the average person to buy music at a fair price, the better it’s going to be for everybody,” he said.
The upswing — Lennox said Universal signed up more artists in the last 24 months than in the decade prior — does not signal a return to the fat profits the industry once enjoyed, however. “Whether album sales are dropping, or rising, there’s not a lot of money to be had there,” said Alper. “When you divide up who gets a portion of the 99 cents per song, it’s pennies.
“It’s not like it used to be in the ’80s, when CDs first came out. They were $26.99 and the record labels were making almost half of that and still paying the artists whatever they were paying for vinyl records or cassette tapes, because a lot of them didn’t have CDs written in their contracts.
“Music is being consumed more than ever before, in any kind of history, but we’re making a little bit less money than we’re all used to.”
With a file from the New York Times