Music industry reports growth for first time since 1999

Legal streaming services, One Direction and Psy all contribute to positive figures

The global music industry has recorded its first increase in revenue since 1999.

A rise in digital revenue, spurred on by the rise of subscription based services such as Spotify, in countries such as Brazil, India, Mexico and Sweden in particular is believed to be behind the growth as well as the global success achieved by Adele, One Direction and ‘Gangnam Style’ singer Psy.

“The industry is on the road to recovery,” claimed Frances Moore, chief executive of the International Federation of the Phonographic Industry (IFPI), adding that revenue rose by 0.3 per cent in 2012. Moore added that the rise represents “a hard-won success for an industry that has innovated, battled and transformed itself over a decade. The music industry has adapted to the internet world and learned how to meet the needs of consumers.”

Psy’s viral hit ‘Gangnam Style’ was pointed to as an example of a song crossing over from YouTube into hard sales figures with the video having been watched 1.2 billion times. Additionally, Michel Telo sold 7 million downloads off the back of his own viral hit, ‘Ai Se Eu Te Pego’. Digital revenue rose 9 per cent in 2012, bringing in £3.6 billion and account for roughly 34 per cent of global industry revenues. People paying to use subscription services have risen 44 per cent in 2012 to 20 million users with Spotify alone having 5 million paid subscribers. This has seen users move away from illegal downloads and toward a legal alternative.

However, the IFPI study did not brush over the continuing problem of piracy in the music industry and called upon Google to prioritise legal download sites in its search results. Moore said: “This growth is still fragile. Google needs to prioritise legal sites in its searches. Far from copyright ‘smothering innovation’, music, based on copyright, is driving the digital economy. Music is driving social network sites. The highest number of searches on Facebook and Twitter are for music artists.” The study revealed that 32 per cent of all music users still use illegal file-sharing sites every day.