The IFPI (International Federation of the Phonographic Industry) released its annual digital music report last week. It reports a strong (51.3%) growth in digital subscription services, as well as growth from ad-supported streaming services.
Like previous IFPI digital music reports, it contains sections describing the industry’s efforts against online infringement, but it also contains sections about its efforts to adjust to the new online environment. One interesting bit, reported by the Star, is that “recording industry is making more money from fan-made mashups, lip-syncs and tributes on YouTube than from official music videos.”
The report describes how YouTube’s tools allow it to monetize unauthorized User Generated Content in order to bring in more revenues than from the “official” videos (page 20):
“Improvements in the handling of user generated content (UGC) are helping rights holders grow income from YouTube and other licensed platforms. Google’s ContentID system (and other systems used by other platforms) has made it easier for rights holders to differentiate between video types, allowing the streaming of non-official user-generated content such as mashups to be licensed and monetised, rather than removed for infringing copyright. YouTube’s TrueView tool for advertising is also having a positive impact in monetising music videos. According to YouTube, revenues generated from UGC on its platform have now overtaken those generated by official videos.”
The industry is also finding new ways to sell digital music in Emerging markets. According to the press release accompanying the report:
A key theme of today’s report is the huge potential of emerging markets following the expansion of licensed digital services in the last three years. Many smaller emerging markets are starting to post significant increases in revenues as digital channels open new opportunities in countries that had a weak physical retail infrastructure. Markets posting significant increases in digital revenue included Argentina (+69%), Peru (+149%), South Africa (+107%) and Venezuela (+85%).
The report also highlights innovative approaches to tap the huge growth potential of emerging markets. Case studies include new pre-paid subscription models bundled with devices in Brazil; the licensing of formerly-unlicensed major internet companies in China; and the opening of new operations in Africa.
