The IFPI released its annual Digital Music Report, complete with an assessment of industry trends and case studies. According to the group’s data, 2014 was the first year that digital channels and physical channels accounted for the same proportion of revenue, 46% each. The digital revenue totaled $6.85 billion for the year out of the industry’s total revenue of $14.97 billion. 2014 was the first year that total revenue dropped below $15-billion.
About 41 million people now pay for music subscriptions, compared with 28 million in the year prior, and revenue from those plans increased 39% to $1.57 billion. Those subscriptions accounted for 23% of global digital music revenue. Ad-supported streaming also posted an increase of 38.6% in revenue.
According to the average sampling of data, the report found that 35% of worldwide respondents had accessed free streaming in the previous six months, and 16% had used a paid music subscription. South Korea and Sweden had the highest percentages of people tuning in via paid streaming subscriptions at 42% and 40%, respectively.
The report’s international assessment showed which markets’ incomes are dominated by subscription streaming versus digital downloads. Sweden, South Korea, Norway, and Finland have more than three-quarters of their digital revenue stemming from subscriptions. On the other side of the coin, more than half of the digital income is from downloads in the U.S., Germany, Australia, and Canada.
The full report also delved into the current state of licensing and royalty payments, touching on some of the most common industry arguments for and against the current models. It noted that artists’ share of sales revenue has actually increased 13% over the 2009-2014 period. Sweden, with its high percentage of paid streaming subscribers, was the prime example of this metric, where artist payments over that time span increased 111% against a corresponding increase of 47% for sales revenue. “In the majority of markets where subscription services account for more than 30% of revenues, artists have benefited from the growing sales and are receiving more money and a larger share of the revenues,” the report reads.
Finally, the IFPI gave some detailed insights about some of the more interesting markets. Digital sales growth was 30.4% in Brazil, and subscription service revenue there rose 22.1%. China poses a challenge to the global music industry, with a huge online population but a resistance to adopting paid music platforms. Germany stood out as one of the few markets where CDs are still a big draw, but at this early stage of transition, subscription streaming has saw its revenue spike up 86.8%.