Music streaming revenue jumped 60 percent in
2016.
Music sales rose robustly for a second
straight year, posting growth not seen in two decades thanks to the rapid
adoption of streaming, the global industry body said Tuesday.
Despite sliding CD sales and downloads,
revenue from recorded music around the world grew 5.9 percent in 2016 to total
$15.7 billion, the International Federation of the Phonographic Industry said.
The growth tops the previous year’s 3.2
percent increase and marks the fastest rate since 1997 — when the recorded
music industry first suffered a jolt with the dawn of the internet age.
Streaming revenue jumped 60 percent in 2016.
Spotify led the way but the report said the market was buoyed by rising
consumer choice among on-demand platforms including Apple Music, Tidal and
Deezer.
Music executives cautioned that the market
remained fragile and that the industry will need to keep adapting, with
streaming only in its infancy.
“Remember, we’re only two years into our
recovery after a decade and a half of decline,” Stu Bergen, CEO for
international and global commercial services at Warner Music Group, told
reporters on a conference call.
“We must remain alert, resourceful and
ambitious. We’re no longer running up a down escalator, but that doesn’t mean
we can relax,” he said.
– Boom felt around the world –
Frances Moore, CEO of the industry federation,
said it was critical for the music business to keep investing in artists, who
ultimately carry the industry’s fortunes.
She also renewed calls for a global overhaul
in regulations that allow internet companies to skirt most responsibility for
users’ uploads — which, music executives charge, leads to unfairly low revenue
from omnipresent video site YouTube.
Music sales expanded in almost all major
markets. Latin America had the highest rate of growth at 12 percent, led by a
boom in Mexico even as the region’s largest market Brazil slipped slightly.
Revenue in China soared by more than 20
percent as international music labels expand in the billion-plus country and
leading local streaming company Tencent pulls in new customers.
The industry body saw the potential for major
growth ahead in China, which despite its size remains only the 12th largest
music market in the world.
Globally, downloading revenue from sites such
as iTunes tumbled more than 20 percent. Physical sales slipped 7.6 percent
although CDs remain a major force in the key markets of Japan and Germany.
Michael Nash, executive vice president for digital
strategy at the world’s largest music group Universal, said the balance among
formats was complex, with downloads clearly slipping in the face of streaming
but vinyl winning a growing market among collectors.
“The digital transition is not a journey with
a beginning, middle and end — physical to download to streaming,” he said.
“It is an ongoing transformation driven by a
rate of technological change that shows no signs of decelerating,” he said.
The report found that Canadian hip-hop
superstar Drake was the most popular global artist of 2016 on the back of
infectious singles such as the streaming sensation “One Dance.”
Rock legend David Bowie, who died last year,
came in second, while Beyonce’s conceptual “Lemonade” was the top-selling album
worldwide.
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