updated 12:03 pm EST, Tue February 26, 2013
Downloads, subscriptions credited as major factors
In 2012, the music industry posted its first overall revenue growth since 1999, according to the International Federation of the Phonographic Industry. Revenues were up 0.3 percent for the year, something the IFPI credits to a mix of downloads, subscriptions, and other avenues. Digital music revenue in particular grew 9 percent to $5.6 billion, just under a third of the industry's total $16.5 billion.
The music industry has shrunk dramatically since 1999, when it achieved peak annual revenue of $38 billion. Digital single sales and piracy have bitten into the steady money CD album sales once provided, and record labels have generally been slow to adapt. Even Apple's iTunes Store -- currently in 119 countries and frequently the most popular digital music source -- has had difficulty securing rights to sell music in some cases.
Subscribers to music services grew 44 percent in 2012, driving the services' collective revenue up 59 percent in the first half of the year. One such service, Spotify, is said to be second only to Apple in fueling digital music revenue in the US. Despite complaints from artists about how little revenue they make from subscriptions, labels are said to prefer the arrangement since it helps restore steady revenue.