Digital Music Is Now a $5.2 Billion Global Industry…

But what about the rest of the music industry? That’s the issue, though at least digital formats are still growing.  According to an estimate released Monday by global trade group IFPI, digital formats are now powering a $5.2 billion industry, thanks to an 8 percent lift in 2011.

The ingredients in this stew are things like album downloads, Spotify subscriptions, and (yes) ringtones.  Granted, it’s single-digit growth, but the IFPI challenged the prevailing wisdom that digital formats are headed towards plateau.  Specifically, the group noted that digital formats gained 5 percent heading into 2011, though it may take a few years to understand the broader trend.

That said, there were some eye-opening details in this report.  For starters, digital formats now account for half of total revenues in two markets: the US (52 percent), and South Korea (53 percent), though both have seen unceremonious plunges in physical (ie, CD) sales.

2011 may also be the year that subscription formats finally took off, though to use an over-used Valley cliche, these are ‘still early days’.  Specifically, the IFPI pointed to a 65 percent year-over-year surge to 13.4 million total subscribers worldwide, with Spotify, Aspiro, and Rhapsody contributing a healthy chunk to that total.


But for all the trumpeting and cheerleading, the IFPI is also stumping for anti-piracy.  It’s a picture that includes cord-snipping laws like HADOPI in France, and failed bills like SOPA in the US.  “Any complacency now… would be a great mistake,” warned IFPI CEO Frances Moore.  “Our digital business is progressing in spite of the environment in which it operates, not because of it.  We need legislation from governments with coordinated measures that deal with piracy effectively and in all its forms. We also need more cooperation from online intermediaries such as search engines and advertisers to support the legal digital music business.”

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