Music Industry Grows First Time in a Decade on Digital Adele

The worldwide recorded music industry’s revenue grew 0.3 percent to $16.5 billion last year, the first increase in more than decade, as more people downloaded music and used online streaming sites.

Adele’s “21” was the best-selling album and Carly Rae Jepsen’s “Call Me Maybe” was the best-selling single, an industry group representing music labels said in a statement today. Digital sales rose 9 percent to $5.6 billion and now account for about 34 percent of total revenue, according to the International Federation of the Phonographic Industry.

The improvement is welcome for an industry battered by piracy, the shuttering of record shops and declining sales of CDs. Digital sales of music now account for the majority of record companies’ revenue in countries including the U.S., Norway, Sweden and India, the IFPI said.

“These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade,” said Frances Moore, chief executive officer at IFPI. “They show how the music industry has adapted to the Internet world, learned how to meet the needs of consumers and monetized the digital marketplace.”

Streaming Music

Major services for downloading and streaming music have proliferated and are now available in more than 100 markets, while subscribers to online music services increased 44 percent to an estimated 20 million in 2012, the group said. The European digital market grew faster than average at about 20 percent in 2012, the IFPI said.

Still, the industry has a problem with unlicensed music services using tracks without permission. To halt such sites, Internet service providers, search engines and advertisers need to cooperate, the IFPI said.

The number of people using illegal music-file sharing dropped by 17 percent last year as more streaming services became free to use, according to research from New York-based NPD Group. The practice peaked in 2005 when one in five Internet users over the age of 13 accessed illegal file-sharing sites to download music, the group said. The figure is now 11 percent.

“For the music industry, which has been battling digital piracy for over a decade, last year was a year of progress,” said Russ Crupnick, senior vice president of industry analysis at NPD. “Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans.”

The IFPI also reported today that British songwriter Adele’s “21” was the first album to top the global chart for two consecutive years since the IFPI began reporting worldwide best-sellers in 2001. Taylor Swift’s album “Red” took second place last year, followed by One Direction’s “‘Up All Night.”

One Direction had two of the top 10 albums of the year and Maroon 5 and Flo Rida each had two songs in the top 10 singles.

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net.

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net.

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