LONDON (AP) -- More than a decade after online file swapping
tipped the music industry into turmoil, record executives may finally be
getting a sliver of good news.
Industry revenue is up. A measly 0.3 percent, but it's still up.
"We're
on the path to recovery," said Frances Moore, whose International
Federation of the Phonographic Industry put together the figures
released in a report Tuesday. "There's a palpable buzz in the air."
In
her forward to the IFPI report, Moore said the return to growth was a
tribute to the transformation of the music industry, saying it had
"adapted to the Internet world."
That change
has been a long time coming. Online song sharing popularized by services
such as Napster at the turn of the millennium seriously destabilized
the industry, which reacted with a barrage of lawsuits and lobbying. But
the war on piracy failed to stem the tide of free music, and by the
time executives finally began making legal music available through
download services such as Apple Inc.'s iTunes, the industry was in a
free fall.
Since its 1999 peak, the global
music industry's revenues have crashed more than 40 percent. Tuesday's
figures, which show a rise in global revenue from $16.4 billion in 2011
to $16.5 billion in 2012, are the first hint of growth in more than a
decade.
Mark Mulligan, of U.K.-based MIDiA
consulting, warned that Tuesday's figures did not mean the industry had
put its misery years behind it.
"We're
probably near the bottom," he said, "but it's so marginal we could
easily have another year or two where it could get worse."
The
physical music market - everything from vinyl records to DVDs -
continues to contract, losing another $500 million in revenue between
2011 and 2012, according to Tuesday's IFPI figures. The industry group
has placed its bets on downloads, streaming, and subscription services
to make up for lost ground, but there's still a long way to go.
Downloads
and streaming audio now account for most of the music sold in the
United States and Scandinavia, but physical music still accounts for the
majority of industry revenue worldwide.
Illegal
music downloads remain a problem worldwide, particularly in potentially
huge markets such as Russia, India, and China. Moore urged governments
to follow the example of the international enforcement action against
Megaupload founder Kim Dotcom, accused by American prosecutors of
facilitating millions of illegal downloads. Dotcom, who is fighting an
attempt to extradite him from New Zealand to the United States, denies
the allegations.
The report hailed the action
against Megaupload and sites like The Pirate Bay - which has been
blocked by several European countries - but it estimated that 32 percent
of all Internet users still regularly downloaded pirated music.
"What
other industry has to cope with a third of its customers being able to
get copies of its products from illegal services?" Moore said.
With
growth uneven across various countries and piracy still a stubborn
problem, it could take years for the industry to return to its previous
health. If it ever does.
Mulligan said he
believes some of the lost revenue may never be recovered, with many
casual users who used to buy the odd CD turning to free services such as
YouTube, television music channels, or Internet radio instead.
"This
is a case of managed decline," he said, predicting "a sustainable but
smaller market built around more engaged music fans."
Copyright 2013 by The Associated Press. All rights reserved.
