Digital Music Report 2012

With the topic of digital piracy on lips around the globe following the controversy that surrounded the proposed Stop Online Piracy Act in the US, the Digital Music Report 2012 tells us that the record labels may well be turning the tide.

Released by the International Federation Of The Phonographic Industry (IFPI) on January 23, the central message of the Digital Music Report 2012 was one of 'momentum'. That the battle over online piracy is surely and ever more swiftly turning in the recording industry's favour, despite the struggles they still face.

Physical sales may still be taking a hammering, but increases in digital music revenues, downloads and the number of music service subscribers suggest that people are now opting for legal forms of consumption in greater numbers.

Whereas IFPI Chief Executive Frances Moore stated that the 2011 report was characterised by "cautious optimism", she said of this year's report: "We have been seeing a momentum building. At the beginning of 2011, the main players like Spotify and iTunes were in 23 countries. They are now in 58 countries worldwide and it's expanding daily."

Moore also noted consumers' move "bit by bit" towards legitimate services, as evidenced by the fact that digital music revenues have grown 8% globally (to an estimated US$5.2 billion). That improves upon the 2010 rate of 5%, signaling the first increase in year-on-year growth since IFPI measurements began.

Rob Wells, President of Global Digital Business at Universal Music Group, was upbeat. "2011 saw great progress across the board," he said of the report's findings. He also pointed to the number of subscribers to legal services having increased over the last 12 months by 67%. Drawing on highlights such as Adele's 21 selling more units in Britain than any other artist in one calendar year, Edgar Berger, President and CEO of International at Sony Music Entertainment, took the opportunity to comment: "No question, the music business is going to be in great shape. We don't have any problem with the product because the consumption is as high as it's ever been." He did, however, temper this by finishing: "We have simply a problem with the payment and the billing."

It is a problem that seems likely to plague the industry for some time yet – the report also revealed that 28% of internet users around the world still avail of unlicensed music sites. The IFPI had hoped the passing of the highly controversial SOPA bill in the US would have done much to counteract that, allowing the US government to target sites with servers overseas. After many protests, it appears SOPA has failed, though the federation hold hopes for a compromise in the weeks to come. In the words of Moore, 2011 was "a year of hard work, a year where we've seen some progress but there's a lot more that needs to be done."