The long-observed decline of physical media has hit a new low, as a global trade group reports that digital finally music generates more money than physical sales.
The International Federation of the Phonographic Industry’s newly published report on the global music market notes that in 2014, global digital music revenue edged out the physical stuff, $6.85 billion to $6.82 billion. On orders of magnitude they’re roughly the same, but the shifts are steep: physical is down eight per cent while digital is up seven per cent.
So people don’t buy CDs any more — what’s the big deal? In fact, how the hell didn’t this happen sooner? Well in the UK this shift actually happened in 2012, so the eventual global change isn’t that surprising.
The real story here is the rapid ascent of streaming music revenue and the overall decline of the music market. Streaming music services account for nearly 23 per cent of the global market, up 39 per cent year over year. But the rise of this new business hasn’t lead to more money: the global market contracted by 0.4 percent. (The IFPI refers to this in a lengthy section about the “value gap” between physical and digital.)
These machinations seem trivial, but they are significant in the long run. Streaming music subscriptions services are popular and people will pay for them, but they’re not the saviour tech companies say they are because they don’t generate the money the recording industry as we know it needs to survive.
Well, screw the recording industry and the major labels that take most of the money we’re talking about here. It doesn’t matter at all except that the old industry could throw money at smaller artists and is currently only thriving because of Taylor Swift and the soundtrack to Frozen. That investment, however parasitic, is going to fade. It’s a bit like Hollywood’s unwillingness to bet on anything but bullshit blockbusters.
Artists will be increasingly left to fend for financial self-sufficiency, which isn't ideal for creativity: I’d rather they spent their time in the recording studio than in business school. [IFPI via WSJ]