The International Federation of the Phonographic Industry (IFPI) released its 2012 report this week, confirming that the music industry may finally have a reason to be cautiously optimistic about its future. The industry saw its first year-over-year growth since 2004, piracy notwithstanding.
The IFPI report is a must-read for anyone who cares about music. Eight things we learned from the report after the jump.
1. Digital revenues are up Digital music revenues ticked up eight percent in 2011 to $5.2 billion. In comparison, it grew by 5 percent in 2010. It also represents the industry's first year-over-year growth in seven years.
2. Overall revenues are down Despite a slight bump in digital income, the overall market suffered a slight decline from $16.7 to $16.2 billion.
3. Piracy is under control (well, sort of) That small loss may be the best news the music industry has heard in a while. Maybe piracy is finally under control. Does this mean that the music industry has finally turned a corner? We'll get back to you on that in 2013.
4. Legal downloads drive digital sales I know you're tired of hearing me sing Spotify's praise in this space, but hear me out on this one por favor. It's true, a la carte services and streaming outlets, like, yes, Spotify, iTunes, Deezer and others played a pivotal role in the industry's growth last year. According to the IFPI, these outlets spread to 58 countries 2011, up from 23 in 2010. The number of subscribers to sites like Spotify and Deezer rose from 8.2 million in '10 to 13.4 million in '11, a 65 percent bump.
5. Please disregard #3. Piracy is still a pain in the ass of the music industry Piracy continues to undermine the music industry, despite the massive shuttering of illegal (and some semi-legal) sites in 2011. The IFPI reports that 28 percent of all web users visited those sites on a monthly basis last year.
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6. What economy? The not-the-twenty-eight-percent web populace who steered clear of Megaupload and its co-conspirators supported the legal alternatives with their wallet. The IFPI says that 3.6 billion downloads (singles, albums, etcetera etcetera) were purchased around the world last year, a 17 percent increase from the previous year.
7. The album is still alive All this talk about digital downloads will have you believe that the album is dead. It's not. It's still in ICU. And it showed signs of life last year with with digital album packages ticking up 24 percent in 2011.
8. Bruno Mars is somewhat popular You know how I know Bruno Mars sucks? My 6-year-old loooves "The Lazy Song." He can sing it from start to finish, on key to boot. But no matter what you think of BM, he's a frickin' beast right now. According to the IFPI, Mars had the most popular digital single of 2011 in "Just the Way You Are" which moved an absurd 12.5 million downloads.
Bottom Line: Listeners are benefitting from widening options and new ways of experiencing music. That can only be a good thing going forward.