SALES OF DIGITAL MUSIC now account for over a third of trade revenues, according to the International Federation of the Phonographic Industry (IFPI), but search engines like Google are keeping more profit out of industry hands.
The IFPI, which represents the interests of the recording industry, said that digital music revenues have increased so that they now account for 35 percent of trade revenues. Physical music accounts for 57 percent.
According to its latest annual report downloads were the biggest source of digital revenues, and their combined track and album sales were up by 11 percent from 2011. iTunes is named as the sales leader here, and Google, Amazon and Microsoft are all credited with having impacts on sales.
Music streaming services like Spotify and Deezer have enjoyed "rapid growth", and the IFPI said that subscription or advertising supported music accounted for 20 percent of global digital revenues. In 2011 it accounted for 14 percent.
The music streaming services appeared to be most popular in Europe, where they pulled in 31 percent of all digital music revenues.
Trade was up across the board, from licensing for advertising through to vinyl album sales, and the price of vinyl, everything is on the rise. Globally the value of all recorded music last year, both physical and digital, was $16.5bn.
In her introduction to the report IFPI CEO Frances Moore said that this is an industry in recovery, and one that desperately needs help to overcome "huge barriers to further growth", namely privacy.
She said that now - and we must remember that this is the year after the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) were defeated - more than ever, the industry needs official help from industry and from government.
"Despite all this success, the industry still faces huge barriers to further growth. One-third of internet users globally still regularly access unlicensed services. What other industry has to cope with a third of its potential customers being able to get copies of its own products from illegal sources?
"I believe that it is at this point, when our industry is on the path to recovery, that the role of governments in securing a fair market environment is more critical than ever," she said.
"We seek cooperation from a range of intermediaries to help control piracy - advertisers, ISPs, payment providers and search engines. Some of these are doing encouraging things; some are not doing nearly enough. Moving the needle on intermediary cooperation in fighting piracy is a top priority for IFPI in 2013. As the figures in this book show, if we can address these challenges, the potential for further industry growth in the years ahead is very exciting."
Deeper in the report under a section titled Tackling Digital Piracy the IFPI said that it is waiting for the outside help that it needs. It called out Google for being slow to delist unlicensed content websites from its rankings.
"In August 2012, Google announced it could alter its algorithm to downgrade unlicensed services in its search results. Rights holders welcomed this commitment, but are still yet to see its effective implementation," it said.
"The industry believes search engines can also do more to ensure they do not generate advertising income for unlicensed services and can increase the amount of infringing links they remove in response to rights holders' requests."
Where government and industry have struck, it said, the impact has been immediate. The shutdown of Megaupload created a ripple across that industry that saw many other websites shut up shop, while the IFPI said that in places where there is strict legislation, so-called 'piracy' has fallen. However. It wants more.
"The industry recognises there is still more to do and calls on governments worldwide to help it uphold copyright law in the digital space," it added.
"Making sure existing copyright rules are properly enforced can help create a more positive environment for creative industries to invest in new talent and bring it to the market, resulting in more opportunities for artists and greater choice for consumers." µ