Finally, good news for music industry

  • Associated Press
  • Tuesday, February 26, 2013 4:46pm
  • Business

LONDON — More than a decade after online file swapping tipped the music industry into turmoil, record executives may finally be getting a sliver of good news.

Industry revenue is up. A measly 0.3 percent, but it’s still up.

“We’re on the path to recovery,” said Frances Moore, whose International Federation of the Phonographic Industry put together the figures released in a report Tuesday. “There’s a palpable buzz in the air.”

In her forward to the IFPI report, Moore said the return to growth was a tribute to the transformation of the music industry, saying it had “adapted to the Internet world.”

That change has been a long time coming. Online song sharing popularized by services such as Napster at the turn of the millennium seriously destabilized the industry, which reacted with a barrage of lawsuits and lobbying. But the war on piracy failed to stem the tide of free music, and by the time executives finally began making legal music available through download services such as Apple Inc.’s iTunes, the industry was in a free fall.

Since its 1999 peak, the global music industry’s revenues have crashed more than 40 percent. Tuesday’s figures, which show a rise in global revenue from $16.4 billion in 2011 to $16.5 billion in 2012, are the first hint of growth in more than a decade.

Mark Mulligan, of U.K.-based MIDiA consulting, warned that Tuesday’s figures did not mean the industry had put its misery years behind it.

“We’re probably near the bottom,” he said, “but it’s so marginal we could easily have another year or two where it could get worse.”

The physical music market — everything from vinyl records to DVDs — continues to contract, losing another $500 million in revenue between 2011 and 2012, according to Tuesday’s IFPI figures. The industry group has placed its bets on downloads, streaming, and subscription services to make up for lost ground, but there’s still a long way to go.

Downloads and streaming audio now account for most of the music sold in the United States and Scandinavia, but physical music still accounts for the majority of industry revenue worldwide.

Illegal music downloads remain a problem worldwide, particularly in potentially huge markets such as Russia, India, and China. Moore urged governments to follow the example of the international enforcement action against Megaupload founder Kim Dotcom, accused by American prosecutors of facilitating millions of illegal downloads. Dotcom, who is fighting an attempt to extradite him from New Zealand to the United States, denies the allegations.

The report hailed the action against Megaupload and sites like The Pirate Bay — which has been blocked by several European countries — but it estimated that 32 percent of all Internet users still regularly downloaded pirated music.

“What other industry has to cope with a third of its customers being able to get copies of its products from illegal services?” Moore said.

With growth uneven across various countries and piracy still a stubborn problem, it could take years for the industry to return to its previous health. If it ever does.

Mulligan said he believes some of the lost revenue may never be recovered, with many casual users who used to buy the odd CD turning to free services such as YouTube, television music channels, or Internet radio instead.

“This is a case of managed decline,” he said, predicting “a sustainable but smaller market built around more engaged music fans.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.