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Digital Music’s Slowdown Draws Out Familiar Industry Worries

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Global digital music revenue has grown 1,000 percent since 2004 – but only six percent through 2010, says the International Federation of the Phonographic Industry’s (IFPI) annual Digital Music Report 2011.

The previous year’s growth rate had been 9.2 percent.

This slowdown will give cause for concern to an industry which says it’s lost 31 percent of its total value since 2004.

So labels are hoping subscription services and, yet again, government action on piracy can improve their fortunes.

Some 13 million tracks are now licensed to over 400 digital music services worldwide, making up 29 percent of their global revenue, the IFPI says.

By volume, song sales have actually been resuscitated by digital in recent years – they are booming, according to recent BPI data.

But a la carte sales growth has slowed or plateauedjust +1.1 percent in the U.S. in 2009. A corresponding 2010 figure wasn’t given by the IFPI in its new report – but it could be negative.

Music units have been flying off shelves in the post-Napster years – they’re just cheaper as bits than as atoms. And it looks like the music business may be reaching saturation point on the number of song downloaders it’s ever going to get.

So the IFPI is repeating the same two core themes of last year, and of previous years. “This was the year we ‘broke the seal’ on subscription services,” CEO Frances Moore writes in the report. “Yet tackling digital piracy is ultimately a task for governments. This is a crisis.”

She points to Spain, where the industry says piracy has particularly impacted on financing indigenous creativity, and is holding up unlimited-access services as potential partners for ISPs and telcos, to reap new revenue whilst making music abundant to consumers legally.

Legislation is being or has been implemented in several countries which would educate, warn and, in some cases, hamper the internet connections of illegal downloaders.

2 Responses to “Digital Music’s Slowdown Draws Out Familiar Industry Worries”


    What does it take to get through to the major label idiots that if you produce a product people want,your sales increase? Has the thought ever entered their pea-brains that maybe people don’t want the cr*p they’re producing? We know that Country,R&B and Jazz music lovers prefer to buy cd’s. Are they producing any music these three demographics are willing to pay for? If you know that younger people are downloading your music for free and refusing to pay,why do you keep producing the garbage that they won’t pay for? You’ve got to follow the buffalo! These idiots just don’t get it. You produce what’s going to make you money! Why abandon 80% of your audience because they’re over 25? If BMW or Toyota or Mercedes decided they were only going to make cars for the under 25 market,how many cars do you think they would sell? If they decided to get rid of all R&D (A&R) and wait for outside designers to come up with new models,how much money do you think they would make? We’re not going to produce a car until someone brings us a concept we like? If that sounds dumb,then why do the major labels operate that way?