German recorded music market grew by 1.2% in 2013

6th March 2014

Streaming revenues nearly doubled

In 2013, revenues from the digital music business grew by 11.7 per cent to €328 million. This means that 22.6 per cent of all music sales in Germany are now digitally generated. While the number of download buyers fell by 1 per cent to 8.3 million in 2013 (BVMI/GfK Panel Services), download revenues were stable overall, growing by 0.8 per cent. They make up 17.7 percent of total music revenues in Germany. As in other countries, single and album downloads developed differently. While digital album revenues increased by 4.8 per cent year-on-year in 2013, single downloads fell by 4.4 per cent. In all, albums now account for 58.7 per cent of all download revenues.

Musically, the trend for German-language music continues. In 2013, seven German artists made it into the annual Top 10 list of the official German album charts as determined by media control GfK, and 45 albums by German artists entered the annual Top 100 list. As before, the top-selling genres in Germany are international pop (30.5%) and rock music (19.2%), with "Schlager", classical and rap music on the rise as they become more of a focus of the German music scene.

BVMI Chairman Professor Dieter Gorny says: "The gratifying market performance is the result of jointly harnessed strengths and investments in a market that still lacks the necessary balancing with regard to the digital dimension. Despite the known risks, the music industry has invested in this market and created attractive products and music services that pick up on the spirit of the times. What's still missing is a policy framework that focuses on legal offers, protects them from illegal offers, and creates security for investors."

Physical music formats remain in demand

The mainstay of the German music market is the sale of physical products, which despite a slight 1.5-percent decline generate turnover of €1.124 billion - more than three-quarters of all music revenues in Germany. The most important revenue driver is still the CD, which recorded its lowest revenue decline in 13 years (-1.3%) and continues to bring in more than €1 billion in Germany. In addition to the traditional CD format, high-quality boxed multi-CD sets, and fan editions are increasingly gaining ground. As a physical complement to digital music consumption, they can continue to leverage the strengths of the CD in future. The continuing mini-comeback of the vinyl record demonstrates that physical formats remain to be popular: After 40-per cent growth in 2012, vinyl sales increased by 47.2 per cent to €29 million in 2013. After a low point in 2006, vinyl now accounts for two per cent of the total market again, but measured in terms of revenues it remains a niche product for passionate collectors and fans.

Stable results for downloads

In 2013, revenues from the digital music business grew by 11.7 per cent to €328 million. This means that 22.6 per cent of all music sales in Germany are now digitally generated. While the number of download buyers fell by 1 per cent to 8.3 million in 2013 (BVMI/GfK Panel Services), download revenues were stable overall, growing by 0.8 per cent. They make up 17.7 percent of total music revenues in Germany. As in other countries, single and album downloads developed differently. While digital album revenues increased by 4.8 per cent year-on-year in 2013, single downloads fell by 4.4 per cent. In all, albums now account for 58.7 per cent of all download revenues.

Streaming revenues nearly doubled

Music streaming was undoubtedly one of the hot topics of the music year 2013. This is reflected not only in the level of media attention, but also in revenues. For instance, revenues from paid streaming subscriptions and ad-supported streaming services increased by 91.2 per cent in all, to €68 million. Germany now has a total of 17 audio streaming providers. These premium and freemium services are also the key revenue drivers in the streaming segment. Seen in the context of total revenues in Germany, streaming nearly doubled its market share from 2.5 per cent in 2012 to 4.7 per cent in 2013. It's still minor significance in terms of revenue also reveals that streaming has not yet arrived in the German mainstream.

BVMI CEO Dr Florian Drucke says: "The final result of the 2013 music year confirms earlier positive trends in Germany and also links to positive developments in the international arena - albeit this is due not to one but to many different recipes for success. For instance, unlike in many other countries, Germany's growth course is based on the strength of the physical market as well as on digital growth. On the other hand, systematic enforcement of the law, and awareness-building schemes like the PLAYFAIR initiative launched in 2013, should also be taken into account."

Streaming's share in total revenue expected to rise to 35 percent by 2018

A recent GfK market assessment forecasts close to zero growth again for the German market in 2014 before it is predicted to pick up again starting in 2015. While streaming currently only makes up 5 per cent of revenues in the German music market, its contribution should grow to 35 per cent in 2018, bringing it significantly closer to international levels.

For further information contact:

Andreas Leisdon, Head of Press and Public Relations, Bundesverband Musikindustrie
Email: leisdon@musikindustrie.de

Tel: +49 (0)30 - 59 00 38 -44