Music Record Sales Drop 3.9% Globally as More Fans Listen Online

The worldwide recorded music industry’s revenue dropped 3.9 percent last year, even as more fans listened to music on Internet streaming and subscription services such as Deezer and Spotify Ltd.

Global revenue for the industry, whose best-selling album was One Direction’s “Midnight Memories,” totaled $15 billion, a group representing music labels said in a statement today. At the same time, revenue from Internet subscription services soared 51 percent. The European music market expanded for the first time in more than a decade, the International Federation of the Phonographic Industry said in the statement.

Worldwide recording industry revenues were dragged down by a 16.7 percent drop in Japan, the world’s second-largest music market, where sales of CDs are only now starting to decline and subscription services are working to establish themselves. The news that digital revenue continued to grow was welcomed by an industry that’s spent most of the past decade closing record shops and figuring out how to stem drops in CD sales.

“Even accounting for the difficult situation in Japan, the global recording industry is in a positive phase of its development,” said Frances Moore, chief executive officer at London-based IFPI. “Revenues in most major markets have returned to growth. Streaming and subscription services are thriving.”

An estimated 28 million people now pay for music-streaming services including Rdio, Spotify and Beats Music and together with ad-supported streams account for 27 percent of digital revenue, IFPI said. Downloads make up two-thirds of all digital sales and are helping drive growth in developing markets such as Hong Kong, Slovakia and South Africa, the group said.

Piracy Threat

IFPI estimates some 26 percent of Internet users still regularly access unlicensed music services and said piracy remains the biggest threat to development of legitimate services and investment in artists.

One Direction sold 4 million copies of “Midnight Memories” last year, followed by Eminem’s “The Marshal Mathers LP2” and Justin Timberlake’s “The 20/20 Experience.”

The best-selling single last year was Robin Thicke’s “Blurred Lines,” followed by Macklemore & Ryan Lewis with “Thrift Shop” and Avicii with “Wake Me Up.”

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