Global revenues from streaming and subscription music services helped digital music sales overtake physical sales for the first time in 2014, according to data from the International Federation of the Phonographic Industry (IFPI). Overall digital revenues rose around 7 percent to USD 6.85 billion, while physical sales dropped 8 percent to USD 6.82 billion. Each category represented around 46 percent of the market, with performance and film rights accounting for the remaining revenues. The industry’s overall global revenues in 2014 remained flat at USD 14.97 billion, said the IFPI. In the digital music category, a sharp 39 percent increase in subscription revenues offset an 8 percent decline in download sales.
In fact, the number of paying users of subscription services increased by over 46 percent to an estimated 41 million people worldwide. Subscription services now make up some 23 percent of the digital market and generated USD 1.6 billion in trade revenues in 2014. Physical sales only remained dominant in a number of key worldwide markets, such as France (57 percent), Germany (70 percent) and Japan (78 percent).
However, the report also referred to the market distortion caused by the way some digital services circumvent normal music licensing rules. Although YouTube has more than one billion monthly users and is considered one of the most popular access routes to music, it generated just USD 641 million for rights holders in 2014.
The report adds that subscription services are increasingly tailoring their payment models to reach specific segments of the market, citing MTV Trax, which offers users in the UK access to 100 songs for GBP 1 per week, and Deezer Elite, which provides a high quality audio service for USD 20 per month.
