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Digital music revenue surpasses CD for the first time - ever

You would think that everyone listens to MP3 music nowadays and CDs have long gone to the musical graveyard together with casettes, but it turns out it isn't quite like that.

It turns out that 2014 saw global digital music revenue exceed that generated by physical formats (led by the CD) for the first time.

The International Federation of the Phonographic Industry (IFPI) issued a report on Tuesday, saying digital revenues rose 6.9 per cent to $6.85 billion (£4.62 billion) in 2014. Meanwhile physical sales dropped by 8.1 percent to $6.82 billion (£4.60 billion).

In numbers it might seem as a tight margin, but in general – it's a huge thing.

A large part of these results is thanks to the growth of subscription services like Spotify. While MP3 download sales dropped eight per cent in 2014 (though it still represents 52 per cent of the digital market), subscription revenues rose 39 per cent.

Aside from digital music revenues now being on a par with physical globally, IFPI's conclusion here is also that "subscription services are now at the heart of the music industry’s portfolio of businesses."

And that is only going to increase, with the likes of Apple, YouTube and Jay Z coming into the frame.

There are still countries in which CD sales dominate. For example in Germany, CD still represents 70 per cent of revenue, while in Japan that figure is 78 per cent.

Frances Moore, chief executive of IFPI, says: “The headline statistics of 2014 speak for themselves, with overall revenues still largely flat, down by 0.4 per cent. Music companies are charting a path to sustainable year-on-year growth. That path was never going to be straight, but we are making great strides along it, embracing new models, licensing, investing and improving consumer choice.”

Sead Fadilpašić

Sead is a freelance journalist with more than 15 years of experience in writing various types of content, from blogs, whitepapers, and reviews to ebooks, and many more, across sites including Al Jazeera Balkans, TechRadar Pro, IT Pro Portal, and CryptoNews.