Music streaming services were the fastest-growing source of revenues for the global recorded music industry in 2012, according to a new report published by the International Federation of the Phonographic Industry (IFPI).
Streaming services now account for 20% of global digital music revenues according to the report, With subscription and ad-supported services combined, streaming services saw its share of global digital revenues grow 14% in 2012 compared to the previous year.
Figures from the IFPI, the recording industry's global trade body, revealed that subscription and advertising-supported music services such as Spotify and YouTube were the key drivers of growth in 2012.
These services paid $1.2 billion in royalties and licence fees last year, up from $700 million in 2011. While streaming accounted for a fraction of the $16.5 billion in total industry revenues in 2012, its rapid growth highlights a significant shift in how consumers listen to music.
Although digital downloads account for the bulk of sales their growth is slowing. Even Apple, which dominates the download market through its online store iTunes, is rumoured to be developing a streaming service.
The rise of these non-traditional formats made up for declining CD sales for the first time, with global recorded music revenues up 0.2 per cent to $16.48 billion.
The figures will come as a boost to artists and record labels, showing that after years of declines, new services are finally offsetting slumping CD sales. The last time total revenues rose, in 1999, physical sales peaked, hitting $27.6 billion.
Performance rights sales, which include licensing for radio, TV music channels and nightclubs, also grew, as did sales of rights for use in adverts and films - known as synchronisation deals.
Approximately 20 million people around the globe are now paying to subscribe to streaming services, a rise from 8 million two years ago. The majority of people stream music for free over advertising-supported platforms such as YouTube, which pass on a portion of their revenues to the record labels.
While Spotify, one of the largest subscription services, charges $10, €10 or £10 a month for unlimited access to a library of 20 million songs and offers a limited amount of listening for free.
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