Music streaming revenue jumped 60 percent in 2016.
Music sales rose robustly for a second straight year, posting growth not seen in two decades thanks to the rapid adoption of streaming, the global industry body said Tuesday.
Despite sliding CD sales and downloads, revenue from recorded music around the world grew 5.9 percent in 2016 to total $15.7 billion, the International Federation of the Phonographic Industry said.
The growth tops the previous year’s 3.2 percent increase and marks the fastest rate since 1997 — when the recorded music industry first suffered a jolt with the dawn of the internet age.
Streaming revenue jumped 60 percent in 2016. Spotify led the way but the report said the market was buoyed by rising consumer choice among on-demand platforms including Apple Music, Tidal and Deezer.
Music executives cautioned that the market remained fragile and that the industry will need to keep adapting, with streaming only in its infancy.
“Remember, we’re only two years into our recovery after a decade and a half of decline,” Stu Bergen, CEO for international and global commercial services at Warner Music Group, told reporters on a conference call.
“We must remain alert, resourceful and ambitious. We’re no longer running up a down escalator, but that doesn’t mean we can relax,” he said.
– Boom felt around the world –
Frances Moore, CEO of the industry federation, said it was critical for the music business to keep investing in artists, who ultimately carry the industry’s fortunes.
She also renewed calls for a global overhaul in regulations that allow internet companies to skirt most responsibility for users’ uploads — which, music executives charge, leads to unfairly low revenue from omnipresent video site YouTube.
Music sales expanded in almost all major markets. Latin America had the highest rate of growth at 12 percent, led by a boom in Mexico even as the region’s largest market Brazil slipped slightly.
Revenue in China soared by more than 20 percent as international music labels expand in the billion-plus country and leading local streaming company Tencent pulls in new customers.
The industry body saw the potential for major growth ahead in China, which despite its size remains only the 12th largest music market in the world.
Globally, downloading revenue from sites such as iTunes tumbled more than 20 percent. Physical sales slipped 7.6 percent although CDs remain a major force in the key markets of Japan and Germany.
Michael Nash, executive vice president for digital strategy at the world’s largest music group Universal, said the balance among formats was complex, with downloads clearly slipping in the face of streaming but vinyl winning a growing market among collectors.
“The digital transition is not a journey with a beginning, middle and end — physical to download to streaming,” he said.
“It is an ongoing transformation driven by a rate of technological change that shows no signs of decelerating,” he said.
The report found that Canadian hip-hop superstar Drake was the most popular global artist of 2016 on the back of infectious singles such as the streaming sensation “One Dance.”
Rock legend David Bowie, who died last year, came in second, while Beyonce’s conceptual “Lemonade” was the top-selling album worldwide.