MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
Germany has delivered some positive news for the global record industry today.
According to figures reported by local industry body BVMI, the country’s revenues from physical music sales and and streaming grew 9% year-on-year to €1.79 billion (approximately $2.02bn) in 2020 on a retail basis.
Needless to say, that growth occurred in spite of the pandemic.
A good three quarters of Germany’s revenues in 2020 (71.5%) came from digital music.
Audio streaming in particular boomed during lockdown in Germany – the world’s fourth biggest recorded music market (after the US, Japan and the UK) – growing 24.6% YoY.
In 2020, revenue generated by the likes of Spotify, Apple Music and other music streaming services in Germany hit €1.13bn $1.27bn).
Audio streaming’s share of total revenues in 2020 was 63.4% (it was 55.1% in 2019).
In contrast’s to streaming’s growth in Germany last year, CD sales in the market fell 18% YoY, suffering significantly from shuttered stores during quarantine.
In spite of this decline, the CD remains the second-strongest format in the German recorded market after streaming, with a 21.6% share of sales in 2020.
Streaming only overtook CDs as the highest earning format in the German recorded music market for the first time in H1 2018.
In 2020, CD revenues in Germany totalled €387m ($437m).
Elsewhere in the market, vinyl revenues grew 24.7% YoY to €99m ($112m), and had an overall market share of 5.5%.
Sales of all physical recorded music – including CD and vinyl – slipped significantly YoY by 11.7%.
Meanwhile, after a drop of 24.8%, downloads now represent just 4.2% of the German recorded music market.
“What was already apparent in the summer has been confirmed: The good digital positioning of our member companies over the past few years means that our industry is currently coming through the crisis well in terms of total sales.”
Dr. Florian Drücke, BVMI
Dr. Florian Drücke, Chairman & CEO of BVMI, said: “What was already apparent in the summer has been confirmed: The good digital positioning of our member companies over the past few years means that our industry is currently coming through the crisis well in terms of total sales – even more so, due to the pandemic-related restrictions on public life, fans have nolens volens increasingly supplied themselves with music in the digital space, which has given us an overall growth of 9%.
“Without a doubt, that’s very good news for now. However, it should not obscure two things: Firstly, as we all know, artists and our sister industries, above all the live business, have been dramatically affected by the lockdowns, and the long-term consequences of the concert cancellations within our closely interlinked industry world are not yet foreseeable.”
Added Drücke: “On the other hand, the increasing digital share of currently 71.5% also necessarily means a significantly increasing urgency with regard to resilient framework conditions in the network.
“Equally important for us is a better understanding of the digital playing field that does not ignore the economic realities of our industry!
“The German implementation of the Copyright Directive must not be allowed to damage the delicate licensing architecture for music companies and artists – because the European compromise wants the opposite: creators and their partners should better participate in the revenues of user upload platforms like YouTube. Video streaming is one of the most popular online usage channels, but does not even contribute 4% to the total revenue in Germany!
“Particularly in the fast-paced and highly competitive environment, legislators must not forget this. Ultimately, the same question arises in shaping the legal framework in Germany as in combating the consequences of the pandemic, namely: What is the value of the cultural and creative industries in our country?”
