A massive rise in earnings from streaming services helped reverse almost 20 years of declining global music revenues last year as money from digital formats overtook physical sales for the first time, trade association IFPI said on Tuesday.
Streaming revenues were up 45 percent in 2015 thanks to the growth of smartphones and licensed quality subscription services as overall global music proceeds grew 3.2 percent to $15 billion, the International Federation of the Phonographic Industry said in its annual report.
Revenues from digital delivery now made up 45 percent of total earnings compared to the 39 percent share from physical sales, it said.
"After two decades of almost uninterrupted decline, 2015 witnessed key milestones for recorded music: measurable revenue growth globally; consumption of music exploding everywhere; and digital revenues overtaking income from physical formats for the first time," said IFPI Chief Executive Frances Moore.
"They reflect an industry that has adapted to the digital age and emerged stronger and smarter."
IFPI said digital revenues had risen by 10.2 percent last year to $6.7 billion which had helped offset the decline in the sales of CDs and other physical formats.
Streaming had grown to such an extent it was close to overtaking the sums earned from downloads, with an estimated 68 million people now paying for a music subscription.
However, the IFPI warned there was a "fundamental weakness" behind the improved revenues because the record consumption of music was not resulting in a fair remuneration to artists or record labels.
Listen, it's great that all of these companies are able to make money by giving away music for free. The last sixteen or seventeen years haven't taught anyone anything. This is more of the same, packaged with new technology, so that the people who make smartphones can breathe a sigh of relief because they don't have to put 300 gigabyte hard drives into those things. They can make a higher profit because the technology of streaming music only affects two people--the ones who have to expand their network to handle the increased traffic and the artists who aren't getting paid.